Crypto Assets Ownership and Indonesian Regulations

- 11 January 2022 08:30 WIB
Bank Indonesia prohibits the use of virtual currency in any form of a payment transaction. (Unsplash/Shubham Dhage)
Bank Indonesia prohibits the use of virtual currency in any form of a payment transaction. (Unsplash/Shubham Dhage)

JAKARTADAILY.ID - Although not considered a payment method in Indonesia, cryptocurrencies are still unique in terms of their legal framework. The country's central bank, Bank Indonesia, has continuously prohibited the use of virtual currency in any form of a payment transaction.

However, with the rise of cryptocurrencies, the government allowed the use of these digital tokens in transactions.

In 2018, the Minister of Trade Regulation issued a regulation that classified cryptocurrencies as commodities. Although Bitcoin and other crypto assets are considered commodities in Indonesia, they cannot be used as payment instruments. Investors can trade cryptos under the Commodity Futures Trading Authority (Bappebti).

NFT marketplaces can also face a legal issue if they allow users to use crypto coins as their currency. Because it is illegal to use crypto as a currency, the users can choose their payment method to comply with the law and regulations in Indonesia.

Although the exact law for NFT transactions is not clear, foreign businesses operating in the country must follow Indonesian regulations if they deal with local consumers. They will be subject to Indonesian law if their transaction volume, transaction value, shipping volume, and/or the amount of traffic meet the threshold.

One of the main issues that arise when it comes to copyright matters is the ownership of NFTs, a virtual asset that can be bought with cryptocurrency. The Indonesian copyright act states that the work depicted in the NFT may be protected. In other words, the creators remain to have the copyright over their work despite if someone else purchased the NFT.

Due to NFTs' decentralized structure, their jurisdiction will inevitably get an issue. Generally, the copyright protection for works of art depends on the country where the work is located.

If an NFT creator is found to have illegally inserted copyrighted work into the network, the copyright holder may sue the NFT creator for infringement.

 

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Editor: Djauhari Effendi

Source: Law Asia

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