The Indonesian government last week announced the launch of a national crypto asset exchange to provide regulators with a record of transactions and better protect cryptocurrency investors.

The Commodity Futures Trading Authority of India (Bappebti) said the exchange and clearing house was set up to strengthen monitoring of the booming industry during a regulatory transition.

Indonesia bans cryptocurrencies as a form of payment, but allows investment in crypto assets. Such investments have boomed during the COVID-19 pandemic, with data showing that 17.54 million people in the country had invested in digital assets as of June, more than the number of registered investors in exchanges.

However, rising global interest rates have dampened demand for crypto assets in recent months.

Indonesia launches national cryptocurrency exchange, clearing house

According to Bappebti, cryptocurrency transactions in Indonesia in the first half of this year fell 68.7 percent year-on-year to Rs 66.44 trillion, with Bitcoin, Ether, Ripple and Binance seeing the largest volume of transactions.

The new exchange will list existing licensed cryptocurrency companies such as Tokocrypto and Indodax.

The head of the regulator, Didid Noordiantmoko, said Commodity Exchange PT Bursa Komoditi Nusantara would be responsible for running the exchange, PT Kliring Berjangka Indonesia, the Indonesian Futures Clearing Center, is responsible for clearing trades on the exchange. PT Tennet Depository Indonesia is a designated crypto asset reserve.

A new law passed earlier this year calls for the transfer of regulatory, supervisory and supervisory powers for cryptocurrencies from Bappebti to the Financial Services Authority for a two-year transition period.