The Growing Puzzle of Indonesia’s Crypto Market
Indonesia has witnessed explosive growth in its crypto user base, which now exceeds 20 million. However, despite this boom, approximately 72% of licensed crypto exchanges in the country remain unprofitable as of 2025. According to the Financial Services Authority (OJK), this paradox highlights structural inefficiencies in the domestic crypto market.
Why Domestic Platforms Are Struggling
While the total value of crypto transactions dropped to IDR 482.23 trillion (~$30 billion) in 2025 from IDR 650 trillion in 2024, the issue isn’t just about declining transaction volumes. Local exchanges face intense competition from well-established foreign platforms offering better execution speeds, lower fees, and more user-friendly withdrawal systems.
As William Sutanto, CEO of Indodax, explains: “The domestic market bears heavier tax and compliance burdens, unlike foreign platforms, which Indonesian traders can still access using VPNs.” This uneven playing field has only exacerbated profitability challenges for local businesses.
Security Concerns Drive Users Away
Following a hack on Indodax in 2024, lingering security concerns have made Indonesian users wary of domestic exchanges. Many crypto enthusiasts cite the time-intensive processes for withdrawals exceeding $1,000 on local platforms as a key annoyance, whereas global platforms provide simpler P2P solutions that can complete withdrawals within minutes.
Global Platforms Raise the Stakes
The arrival of major global players such as Binance, Bybit, and Robinhood has further intensified competition. Robinhood’s acquisition of PT Buana Capital Sekuritas and PT Pedagang Aset Kripto highlights the growing interest of international brands in Indonesia’s crypto market. Meanwhile, Binance operates locally through Tokocrypto, and Bybit has partnered with NOBI to form “Bybit Indonesia.”
These international platforms not only have significant financial backing but also face fewer regulatory frictions, allowing them to offer competitive services that domestic platforms struggle to match.
A Regulatory Shift and What Lies Ahead
January 2025 marked a major regulatory shift with the OJK assuming oversight responsibilities from the Commodity Futures Trading Regulatory Agency (Bappebti). This move aimed to enhance licensing processes and create a healthier business environment. Unfortunately, the number of licensed exchanges has ballooned to 29, resulting in overcrowding and thinning profit margins for existing players.
Illegal, unlicensed platforms add further pressure. These platforms are estimated to cost Indonesia $70–110 million in annual tax revenue, compounding the challenges for domestic exchanges trying to cultivate trust and stability.
Rebuilding Trust Is Key
To regain user trust, platforms like Indodax must demonstrate robust security measures and provide consistency in their operations. Collaboration between industry stakeholders and regulators is also essential. Sutanto emphasizes the need for enforcing regulations on illegal foreign platforms while fostering a fair domestic ecosystem that can sustainably compete with global giants.
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