The largest Indonesia Digital Asset Exchange known as INDODAX which deals with the buying and selling of cryptocurrencies such as bitcoin, ether, litecoin etc. is poised to overtake its country’s century-old stock exchange.
INDODAX was earlier known as Bitcoin.co.id which began its operations since 2014 currently has 1.14 million members. According to its Chief Executive Officer Oscar Darmanwan, INDODAX will have more than 1.5 million users trading digital currencies before the year’s over.
In contrast to Indonesia Stock Exchange, which offers stocks, futures, and exchange-traded funds and just has 1.18 million enlisted members, based on data from the Indonesia Central Securities Depository.
Darmanwan said in a statement that “We are seeing almost 3,000 new members signing up every day”.
Reason for Rebranding
Darmanwan mentioned that the reason for rebranding the exchange was to reaffirm the organization’s position as a digital asset exchange.
“Many people recognized us as a payment system using Bitcoin. In fact, we didn’t intend to have such payment system,” Darmawan said. The exchange is currently focused on the task of rebranding, and Darmawan has asserted that the transaction and organizational structure won’t be affected by the changes. Thus, guaranteeing the trade’s clients that they won’t encounter critical adverse effects:
“We guarantee our members won’t be affected because we’re conducting the rebranding process smoothly.”
INDONAX is expecting that its daily trade volume would exceed an average of 100 billion rupiahs which is equivalent to $7.3 million a day. The Indonesia stock exchange, in contrast, recorded average daily transactions of $550 million in 2017, as indicated by information from the bourse.
That being said, Oscar was hesitant to reveal the processes involved with INDODAX legal structure amid the rebranding. “We’ll release our official statement after it’s all done. The process is underway now,” he said.
Opposition From The Bank of Indonesia
The Bank of Indonesia recently took a firm stand against cryptocurrencies. While the bank has not yet banned exchanges from offering cryptocurrencies, they have declared that it does not regard digital currencies as a legal tender, and has asked investors to avoid owning or trading them.
According to the Bank of Indonesia in a 2018 January statement, “Owning virtual currencies is very risky and inherently speculative,” Saying:
“Digital tokens are prone to forming asset bubbles and tend to be used as a method for money laundering and terrorism funding, so it has the potential to affect financial-system stability and harm the public.”
The action taken by the Bank of Indonesia reaffirms the current challenges faced by Financial regulators around the world as they try to curb the potential dangers associated with the use of digital currencies, however often don’t have the authority to ban their use.
With INDODAX poised to overtake Indonesia stock exchange based on the number of investors, it is uncertain whether a significant proportion of Indonesia’s population would heed the warnings issued by the central bank.