Why Indonesia’s Upcoming Elections Could Make or Break the Country’s Vibrant Crypto Sector

Indonesia’s government has shown a keen interest in crypto – but the general elections in February could shake things up for the industry, especially if leadership were to change.

While current President Joko Widodo’s government had global plans for crypto issued in Indonesia, and even set up the world’s first bourse for digital assets, the next leaders may not be as excited about the sector.

Not all leading candidates have been vocal about crypto, but their comments offer clues about where the industry might be headed under their leadership.

For instance, presidential and vice-presidential candidates Anies Baswedan and Muhaimin Iskandar have been relatively quiet on crypto matters. However, they represent the opposition, and the duo has plans for an overhaul of existing policies, which may have some consequences for the crypto sector.

In 2022, Muhaimin advocated for taxing crypto transactions to boost state revenues. He also called for stricter regulation, including for the sector to be supervised by the Financial Services Authority (OJK). The OJK will indeed be taking over crypto supervision in 2025, but the industry is hoping that changeover could mean lesser tax burdens for crypto users and exchanges – something it says has been driving away traders.

Another candidate pair is made up of presidential hopeful Ganjar Pranowo and his running mate Mahfud MD, who is a veteran politician and constitutional law expert. They haven’t talked about crypto during the campaign, but back in 2022, when non-fungible tokens (NFT) were having a moment, Ganjar, the governor of Central Java at that time, praised the creativity of NFTs.

Ganjar saw Ghozali, one of Indonesia’s NFT success stories, as a source of inspiration for the country’s youth. Still, he made sure to drop a reminder on the importance of paying taxes to keep the nation’s well-being.

Leading the race

The candidate most vocal about crypto so far is Gibran Rakabuming Raka, the controversial running mate of current Defense Minister Prabowo Subianto. Raka is the son of President Widodo and a strong proponent of digitization – particularly with blockchain and crypto.

In December, he made headlines for saying he wants to prepare blockchain and crypto experts to improve Indonesia’s tech sector. He reiterated this during the second official presidential debate focused on economic and infrastructure topics on Dec. 22.

Prabowo has meanwhile said his government will enhance the supervision of tax compliance among stock and crypto traders to combat tax evasion.

Prabowo and Raka together seem to be most likely to continue existing policies and attitudes toward crypto in the country – and potentially embrace more crypto-friendly regulatory changes.

Indonesia’s general elections are set to start on Feb. 14.