The Ultimate Guide To Investing Bitcoin In Indonesia

Bitcoin is the world's first cryptocurrency and remains very popular, with a wide range of people and organisations investing in it. Indonesia is set to become a major player in the crypto space in Asia. In 2018, the Indonesian Ministry of Trade judged that Bitcoin (BTC) and other crypto assets are legal, classifying them as commodities. Since then, Indonesia has continued to introduce new, tailored regulations, providing more clarity and supporting citizens who wish to invest in and trade crypto.

The position of the Indonesian government towards cryptocurrency is ambiguous. In January 2022, the country's financial regulator OJK banned financial organisations from using, selling and facilitating crypto trading. However, crypto trading is very popular in the country, and the number of transactions increases each year. It should be noted that crypto trading in the country is allowed on commodity exchanges, and the Indonesian authorities have created a separate state-owned digital asset exchange called Digital Futures Exchange.

There are several options for buying Bitcoin in Indonesia, including Indodax, Tokocrypto, and Binance.

Register with a brokerage, app or exchange

Registering with a brokerage, app, or exchange is the first step to buying Bitcoin in Indonesia. There are several trusted online cryptocurrency exchanges operating in Indonesia, including Indodax, Tokocrypto, and Binance. These platforms allow users to trade Bitcoin and other cryptocurrencies with rupiah.

To register, you will need to provide your full name and email address, as well as accept the platform's terms of use and privacy policy. Most exchanges will also require you to complete a Know Your Customer (KYC) verification process, which may include uploading proof of identity and address. This is a legal requirement for almost all exchanges in Indonesia and is an important step to ensure the security of your account.

When choosing an exchange, it is important to consider factors such as fees, security, payment methods, and the range of cryptocurrencies offered. It is also essential to use a secure internet connection when registering and providing personal information, as public WiFi may pose security risks.

Once you have completed the registration and verification process, you will be able to deposit funds and start trading Bitcoin and other cryptocurrencies on the exchange.

Complete a Know Your Customer (KYC) process

To invest in Bitcoin in Indonesia, you will need to complete a Know Your Customer (KYC) process. This is a mandatory step to ensure Anti-Money Laundering (AML) policies are implemented. The KYC process is straightforward and typically involves the following steps:

Provide Proof of Identity

You will need to upload a copy of a valid government-issued ID, such as a National Identity Card (KTP), passport, or driver's license. Ensure that all details on your ID are clearly visible and not obscured in any way. Some platforms may also require you to upload a selfie for additional verification.

Proof of Address

In addition to verifying your identity, you may also be required to provide proof of your residential address. This can typically be done by uploading a recent utility bill, bank statement, or any other official document that displays your name and address.

Two-Factor Authentication (2FA)

To enhance security and protect your account, you will need to set up two-factor authentication. This typically involves providing your mobile phone number to receive verification codes when logging in or making transactions.

Complete the KYC Form

After submitting the required documents and information, you will need to fill out a KYC form. This form will typically ask for personal information such as your full name, date of birth, address, and other relevant details.

Wait for Verification

Once you have completed the above steps and submitted all the required information, you will need to wait for the exchange or platform to verify your identity. This process can take up to one working day or more, depending on the platform.

It is important to note that the specific KYC process may vary slightly between different exchanges and platforms in Indonesia, so be sure to carefully follow the instructions provided by your chosen platform. Additionally, keep in mind that completing the KYC process is a necessary step to comply with regulatory requirements and enhance the security of your transactions.

Make a fiat deposit

Once you've registered with an exchange, completed your Know Your Customer (KYC) verification, and linked your bank account, you're ready to make a fiat deposit.

All registered exchanges in Indonesia accept the local fiat currency, the Indonesian rupiah (IDR). You'll need to deposit this fiat currency into a specific fiat wallet on the platform, which you can then use to buy Bitcoin (BTC) or other crypto assets.

The minimum deposit amount varies across exchanges, typically ranging from Rp 30,000 to Rp 50,000. However, some exchanges may require a minimum deposit of Rp 500,000.

It's important to research the various deposit methods before transferring funds, as certain methods may be subject to deposit fees. Here are some of the deposit methods supported by popular Indonesian exchanges:

• E-wallet (OVO, GoPay, ShoppePay)
• PPOB (e.g., Alfamart)
• Credit or debit card (usually for overseas exchanges only)
• Bank Transfer
• Credit Card
• ShopeePay
• Dana
• LinkAja
• Bitcoin

Buy cryptocurrency

Before buying crypto in Indonesia, there are a few things to keep in mind. Crypto assets are defined as commodities and are not recognised as legal tender by the Bank of Indonesia. This means that crypto cannot be used to make payments for goods and services and is limited to trading activities.

There are several ways to buy cryptocurrencies:

• Brokerage services: Crypto brokers allow users to simply buy and sell cryptocurrencies.
• Cryptocurrency exchanges: These are online platforms where users can buy, sell, and trade cryptocurrencies using fiat currency or other cryptocurrencies.
• Peer-to-peer (P2P) marketplaces: These are platforms where buyers and sellers can directly trade cryptocurrencies without the involvement of a third-party exchange.

Steps to Buy Cryptocurrency in Indonesia:

• Register with a brokerage, app or exchange: You will need to complete a Know Your Customer (KYC) process. This will require a national identity card (KTP) or other acceptable ID, a private and secure internet connection, a mobile phone to verify your identity using two-factor authentication (2FA), and a bank account to make deposits.
• Create an account with an exchange: You can register and open an account with an exchange such as Binance, Indodax, Upbit, or Tokocrypto. Provide your full name and email address, and accept the platform's terms of use and privacy policy.
• Complete the KYC verification phase: Upload proof of identity, provide proof of address, and upload a selfie. This step is important to ensure Anti-Money Laundering (AML) policies are implemented.
• Make a fiat deposit: All registered exchanges in Indonesia accept the local fiat currency, the rupiah (IDR). Deposits can be made via e-wallet (OVO, GoPay, ShoppePay), PPOB, credit or debit card, or bank transfer.
• Buy cryptocurrency: Once your deposit is confirmed, select the cryptocurrency you wish to purchase, input the amount in IDR, and complete the transaction.

It is important to note that while buying crypto in Indonesia is easy and legal, you should always perform your own research and analysis before making any financial decisions.

Store in a crypto wallet

Once you've purchased your Bitcoin, it's important to consider where you will store it. You can keep your Bitcoin in a crypto wallet, which is a device or program that keeps your crypto assets, private keys, and wallet addresses (public keys) all in the same place.

There are several types of crypto wallets, including:

• Hardware wallets: These wallets allow users to hold their private keys in cold storage, which is not connected to the internet. This means your crypto is safe from hackers. You can bring a hardware wallet online to make transactions. An example of a hardware wallet is the Ledger Nano S Plus.
• Mobile wallets: These are hot wallets held on your smartphone, which can be great for sending or paying with crypto. However, they are less secure than cold wallets and are not recommended for storing large amounts.
• Paper wallets: This is an offline method where you print out your private and public keys. Once funds are sent to the public key, they are taken offline and can only be accessed by sweeping the private key into a hot wallet. Paper wallets are not commonly used anymore due to the high risk of user error or wallet damage.
• Hot wallets: These wallets hold funds online and can be easily accessed. Most crypto exchanges provide free hot wallets with little to no setup required, but you need an account with the exchange to access them.
• Cold wallets: These wallets hold funds offline in cold storage, keeping your crypto safe from hackers. Cold wallets can be temporarily brought online to make transactions. An example of a cold wallet is Zengo, an easy iOS and Android crypto and NFT wallet.
• Exchange wallets: When you buy crypto on an exchange, the funds automatically go to your exchange wallet. This is a custodial hot wallet hosted by the exchange, which holds the private keys for you. While convenient, you do not have total control over your private keys, and there is a risk of hacks and theft.

When choosing a crypto wallet, it's important to consider your needs and preferences. For example, if you plan to make frequent transactions, a hot wallet or mobile wallet might be more convenient. On the other hand, if you want to store large amounts of Bitcoin, a cold wallet or hardware wallet would be a more secure option. Additionally, consider the level of technical expertise required for each type of wallet and choose one that aligns with your skills.

It's worth noting that you can use a combination of wallets to balance security and usability. For instance, you could use a hardware wallet for long-term cold storage and a mobile wallet for spending and transacting with crypto. Remember to always create backups for your wallets and educate yourself about your chosen wallet to minimise the chance of user error.

Frequently asked questions