Indonesia is the largest island country, comprising more than 13,000 islands. Due to this, it’s the 4th most populous country, with a population of about 266.7 million. It’s equivalent to about 3.5% of the world’s total population. When it comes to size, Indonesia is the 14th largest country in the world in terms of land area. In terms of combined land and sea area, it’s the 7th largest. It also has the largest economy in Southeast Asia with a high-middle income class combined with high internet penetration. Soaring smartphone usage combined with the above factors has spurred the growth of FinTech startups in the country with more than 150 startups existing in the country alone.

About 43% of the FinTech players in Indonesia are in the payment sector. Most of their services range from mobile payments, payment gateways, cards, and lending. As of January 2018, about 30 peer-to-peer lending firms had lended about $193.8 million to about 250,000 people. The FinTech industry in Indonesia is growing at a rapid rate. The e-commerce market was valued at $18 billion in 2015 and is estimated to hit $56 million in 2020. The lending and payment industries are currently valued at $29.4 million and $23 million respectively. According to data acquired from Tech in Asia’s database, Indonesian FinTech start-ups have enjoyed about $56 million in funding between 2013 and 2017. One notable mention is Indonesia’s Bank Central Asia (BCA) that joined the FinTech race with an estimated $15 million in venture capital.

Acceptance and Adoption Levels

Even though the FinTech economy in Indonesia is thriving, blockchain and cryptocurrency adoption are still at their infancy stages. However, the Indonesian government is looking into ways of adopting blockchain technology to overcome data challenges. Indonesia comprises about 17,000 islands with a total population of about 257.6 million people. Therefore, it’s a challenge to establish a concrete data system that keeps accurate data. In fact, rumors are that it’s currently difficult to prove whether citizens have paid taxes or not. The need for a concrete data management system has pushed several state-owned banks and government bodies to launch investigations into blockchain technology and its potential use cases.

To aid in subduing the data management crisis in the country, Online Pajak, a FinTech company, has launched a blockchain-powered application that allows the sharing of encrypted tax data with institutions such as the tax and treasury offices, banks, and the central bank. In a vastly segregated country, it becomes hard for the government to keep track of its people and their activities. The central bank is also considering issuing a state-owned digital currency, Digital Rupiah, which may have the potential to replace traditional fiat currency. However, the central bank is still looking into blockchain technology and has confirmed that if it does indeed launch the Digital Rupiah, it won’t be soon.

Legality of Cryptocurrency in Indonesia

The Indonesian Central Bank has issued several warnings on the use of cryptocurrencies. However, the country’s regulations remain fairly open towards blockchain technology and cryptocurrencies. With that said, the central bank has banned the use of cryptocurrencies as a form of payment in Indonesia. The Indonesian government has not placed any ban on cryptocurrency exchange platforms or owning crypto-assets. In fact, the central bank is analyzing blockchain technology to determine whether it’s possible to launch a central bank-backed cryptocurrency. Other banks have announced that they are looking into blockchain technology and are thinking of launching blockchain-based applications.     

Potential Applications of Blockchain in Indonesia

  • Anti-Fraud

There are many banks operating in Indonesia. In fact, there are even several regional ones that operate in certain regions. These banks usually have no access to the country’s debt information. Due to this, some borrowers are practicing loan stacking. Loan stacking is the process where a borrower takes multiple loans at the same time from different financial institutions. In some cases, these loans are used to pay other loans. Blockchain technology can help alleviate this issue by making sure that consumer information is shared among different banks and financial institutions ensuring that customers don’t take out multiple loans.   

  • Anti-Corruption

Blockchain technology has the potential to increase transparency, simplify processes, and get rid of middlemen in the transaction process. The transaction process can be slow and often there is room for human error and fraud. Blockchain can help develop a system whereby information and data are sent in a secure way. Therefore, largely displacing corruption woes in the financial system.

Gold in Indonesia

Indonesia appears in the list of the top 10 largest gold producers. It produces about 4% of the global gold production. Half of this originates from the Grasberg mine, which is the world’s largest mine located in the western half of Papua. It holds about 25.8 million ounces of gold as well as 26.9 billion pounds of copper. Other locations with large mines in Indonesia include Papua, Sumbawa, East Kalimantan, and Central Kalimantan. Gold production in Indonesia has remained the same, with the country producing about 80 metric tons of gold in 2016 and 2017.

There is a significant gold jewelry market in the country but most of the gold production is shipped abroad. Indonesian investors invest in gold as it has the potential for significant price appreciation, albeit not as often as expected. Gold also provides a hedge against a number of economic issues such as inflation, deflation, and decreasing fiat value.


From the looks of things, the Indonesian economy is already looking good in terms of gold and blockchain use and adoption. At DinarDirham, we have combined the value and investment aspects of gold with the speed and flexibility of cryptocurrencies in our DinarCoins. Our DinarCoins can be traded for Gold Smart Contracts which can be redeemed for physical gold bullion. Now Indonesians or anyone else with an interest in DinarCoin can take advantage of this opportunity.

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