Indonesia’s Crypto Exchange Transaction Volume Plummets by 60% in 2023 due to High Taxes

Indonesia, known for its rapid adoption of cryptocurrencies, experienced a significant 60% decline in transaction volume on crypto exchanges in 2023 compared to the previous year. Local exchanges attribute the drop in activity partly to the imposition of income and value-added taxes (VAT) on crypto transactions, treating them as commodities. The tax burden, which can surpass trading fees, is seen as a deterrent for traders. To address this issue, some in the local crypto industry advocate for recasting crypto as securities, hoping it would alleviate the tax burden on users. The shift in oversight to the Financial Services Authority (OJK) in January 2025 may pave the way for potential changes in taxation and classification. Until then, uncertainties loom over how local exchanges will navigate further declines in transaction volume. (Source: Coindesk)