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How Traditional Financial Instruments Are Breaking Out in the World of Crypto

Want to remove some of the volatility from your investments? Here’s a look at some of the traditional financial instruments making waves in the crypto world.

The crypto market has been brutalizing of late – but many traders don’t realize that there is a plethora of financial instruments out there. Each offer investors a new way to back crypto, without relying on the highs and lows of cryptocurrency prices in an erratic and volatile market.

But what are these alternatives – and are they really everything they’re cracked up to be?

In many cases, some of the new products emerging in the crypto market are iterations of services that have existed in the old-fashioned financial world for years. Bonds are a good example. These have been kicking around for more than 500 years – and back in 1694, they were issued by the Bank of England to fund a war against France.

How do they work? In essence, they are a fixed-income instrument that amounts to something of an “I.O.U.” Lenders give businesses the money that they need to achieve their aspirations, with borrowers usually receiving interest rate payments once per year until the full amount of the loan is due. When it comes to interest, this could fluctuate based on variable rates, or it may be fixed.

Bonds have already been gaining momentum – with the World Bank hitting the headlines back in summer 2018. On August 10, the first blockchain-based bond was issued by the biggest bank in Australia – Commonwealth Bank of Australia. This is not the first debt instrument to be issued through blockchain – with Spain’s BBVA signing a $117 million loan over the summer in a bid to benefit from the traceability and transparency of smart contracts.

The hope is that crypto bonds could enable blockchain-based businesses to generate money to grow – offering them an alternative from ICOs, which have had something of a torrid time of late. Although research in October suggested that more than $20 billion had been raised through initial coin offerings since the beginning of 2017, this has been slowing of late – with ICO funding for August 2018 ranked the slowest for 13 months.

Futures: The future?

Futures have been a hot topic of discussion in the crypto world ever since Bitcoin reached the dizzying highs of $20,000 towards the end of 2017.

These conversations have rumbled through right up to today, with the volatility seen in the crypto market showing no signs of abating. In brief, futures involve two parties agreeing to buy or sell cryptocurrencies at a previously agreed-upon price on a set date. Rather than being used as a mechanism that helps to boost profitability, futures are often relied upon as a way to mitigate risk.

Why is this a compelling financial instrument? Let’s say you believe that Bitcoin’s value is going to rise in the coming months. You can buy a three-month contract for one Bitcoin at the current price and receive it at contract’s conclusion. If the price of Bitcoin rises dramatically over those 90 days, you would be buying it at the same price, resulting in a tidy profit.

Of course, this instrument can work conversely. Let’s imagine that you bought Bitcoin at an optimal moment, but you think that the price is about to fall precipitously. Through futures, you have the opportunity to enter into an agreement where you sell the Bitcoin at its current price in three months’ time – and if its value tumbles, you pocket the profit. It’s fair to describe such behavior as a bet, as no one can predict where the market is going, but if you’re experienced and have insight into crypto movements, futures could prove indispensable.

So yes: futures can help traders shield themselves against the perils of fluctuation – and give investors in countries where crypto is banned a chance to get involved. That said, it isn’t without risks. Given the dramatic highs and lows seen in crypto in recent months, you could argue that futures are tantamount to gambling. Red or black?

There are other options

Puns can never let you down during a heavy feature that focuses on crypto financial instruments. If you don’t think that futures are the future, options are an option for you. These instruments mean that you have the right to buy or sell Bitcoins at a particular price when the options mature, but you are not obligated to complete the transaction. There is often a premium for using these financial services.

These dramatic shifts in the crypto market have sparked diversification by digital asset platforms – giving investors greater choice. Bonds, futures and options are beginning to flourish in the industry. For example, Bibox, an AI-driven exchange, has just launched bonds, aiming to give new opportunities to traders.

A slowdown in ICOs has meant that startups are looking for new ways to raise capital, while investors are on the lookout for new ways to protect and grow their assets. Whether derivatives gain momentum in 2019 is yet to be seen, but there’s no doubt that chatter surrounding financial instruments is on the increase.

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

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Tom Lee: CBOE Ethereum Futures May Hurt ETH, But Benefit Bitcoin (BTC)

BTC Could Rise As A Result of Ethereum Futures

Even in a market downturn, development in this nascent industry rages, with firms continually releasing innovative products and services that could change the future of crypto. And as reported by Ethereum World News previously, the CBOE, the foremost US-based options exchange, is just months away from launching Ether futures that will be based on Gemini markets.

This news immediately sparked speculation about the effect this vehicle would have on the market, with many optimists noting that this futures contract should help to propel the price, development, and maturation of Ethereum, and subsequently, the growth of this industry.

While many agreed with this hope, Tom Lee, the head of research at Fundstrat Global Advisors, expects this news to benefit the price of Bitcoin (BTC) more than the price of Ethereum (ETH).

Speaking with Business Insider reporters, Lee, who has become well-known, if not near-infamous for his seemingly undying bullish sentiment on Bitcoin, noted that Ether futures will allow speculators to weigh down on the price of ETH.

His claims seem to be corroborated by the historical price action of Bitcoin following the initial CBOE and CME futures release. Since Bitcoin futures debuted in mid-December of last year, prices tanked, with Bitcoin briefly touching $20,000 before tumbling to $7,200 as it stands today. Some think thatEthereum Blockchain Token this is no unfortunate coincidence, but rather, the effect of short sellers placing bets against Bitcoin via the futures market.

As such, the Fundstrat Bitcoin bull then noted that the same effect, albeit likely not as drastic, could occur this time around as well, with the planned December 2018 introduction of the CBOE-backed Ether futures contract potentially lining up with a substantial decline in the price of ETH.

On the other hand, however, Lee added that the introduction of Ether futures may alleviate some of the pain placed on Bitcoin by bears, as the short interest may translate from the BTC contract to the ETH contract. The Fundstrat executive elaborated, stating:

“Since December of this year, if one was bearish on any aspect of crypto but did not want to own the underlying, they could short BTC. They can now short eth, means the net short on BTC in futures would fall.”

Some skeptics of this theory pointed out that it is somewhat counterintuitive, but upon thinking about it further, it is clear that Tom Lee’s thought does hold some credence at the very least.

Ethereum has already had a bad year, so many are hoping that the eventual introduction of these futures will not hamper the price of the asset further. But for now, only time will tell what the short to mid-term fate of the second largest crypto asset will be.

At the time of writing, Ethereum is down 1.4% in the past 24 hours, as it currently sits at $294 after falling from yesterday’s highs at $303.

ethereumImage Courtesy of TradingView.com

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Bitcoin Breaks Above $7,000 as Crypto Market Rallies Into Green

Tuesday, August 28: crypto markets are seeing strong positive momentum bolster a persuasive recovery, as Bitcoin (BTC) breaks above the $7,000 price point and all but 3 altcoins amid the top 100 cryptocurrencies post strong gains on the day. Growth among the top ten largest assets ranges between 4.5 to almost 20 percent, as Coin360 data shows.

Market visualization from Coin360

Market visualization from Coin360

Bitcoin (BTC) is trading at around $7,016 at press time, up around 4.2 percent on the day, according to Cointelegraph’s Bitcoin price index.

The top coin has seen several days of recovery since its brief price dent August 22 in the wake of toughened anti-crypto measures in China and a fresh series of disapproval orders for several Bitcoin exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC).

Bitcoin’s 7-day price chart

Bitcoin’s 7-day price chart. Source: Cointelegraph Bitcoin Price Index

On the week, Bitcoin is up a strong 4.1 percent, with its monthly gains now around 9.1 percent.

Ethereum (ETH) is trading around $289 at press time, up a solid 3.4 percent on the day.

While, the coin has yet to reclaim the $300 price point — which it last held August 20 — today, August 28, has seen the first persuasive upswing in price performance after a jagged and tentative week range bound between $270-280. Ethereum is now up 3.4 percent on the week; on the month, losses are just slightly down and remain at a stark 37.8 percent.

Ethereum’s 7-day price chart

Ethereum’s 7-day price chart. Source: Cointelegraph Ethereum Price Index

Among the top ten coins by market cap, Cardano (ADA) is up over 9 percent to trade at $0.10 at press time, with Litecoin (LTC) up 7.64 percent and Ripple (XRP) up 7.3 percent to trade at $61.88 and $0.35 respectively.

The strongest top ten performer is IOTA (MIOTA), soaring a staggering 19.4 percent on the day and capping two days of rapid growth to trade around $0.71 at press time.

IOTA’s 7-day price chart

IOTA’s 7-day price chart. Source: CoinMarketCap

IOTA’s growth has skyrocketed since August 27’s announcement that Japanese ICT conglomerate Fujitsu is launching an IOTA-based proof-of-concept (PoC) for audit trail processes in the manufacturing industry.

Among the top twenty coins on CoinMarketCap, TRON (TRX) is up 14.5 percent on the day to trade around $0.03, NEO is up 15.77 percent at $21.18 and DASH, ranked 13th, has outstripped all the top 100 cryptos on the day by rising 27 percent to $186.54.  

Dash’s 7-day price chart

Dash’s 7-day price chart. Source: CoinMarketCap

Total market capitalization of all cryptocurrencies is at around $230.55 billion at press time, up around $15 billion since the start of trading Monday 27th.

7-day chart of the total market capitalization of all cryptocurrencies

7-day chart of the total market capitalization of all cryptocurrencies from CoinMarketCap

As the crypto spot markets rally, and Bitcoin reclaims ground above $7,000, fresh data from the U.S. Commodity Futures Trading Commission (CFTC) shows that bearish positions for non-commercial contracts of Bitcoin (BTC) futures are also on the decline.

As shown by the negative total tally on the CFTC’s latest Commitments of Traders (COT) report, the market is still overall net short, yet the new figure of -1266 indicates a sharp turnaround from the -1926 recorded earlier this summer.

Blockchain, meanwhile, has this week drawn the attention of two of the “Big Four” global audit firms, Deloitte and PwC, both of whose fresh reports revealed high percentages of enterprise executives convinced by technology’s potential.

In the banking sector, JP Morgan CIO Lori Beer has this week said that blockchain will “replace existing technology” within a few years, and today, Germany’s joint stock company Deutsche Boerse (DB) furthered its partnership with blockchain-based liquidity provider HQLAx by making a million euro investment to become a minority shareholder.

To cap it off, the South Korean government has just announced its state-sponsored blockchain hackathon to encourage the technology’s inroads into the public and private sectors.

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Upside Calling? Bearish Bets on Bitcoin Futures Hit Record Low

The bearish sentiment in the bitcoin (BTC) futures market hit a record low last week, likely indicating the worst of the plunge in the leading cryptocurrency is behind us.

The non-commercial futures contracts of Bitcoin futures, traded by large speculators and hedge funds, totaled a net position of -1266 contracts in the week ended Aug. 21 – the lowest on record, according to the data released by the Commodity Futures Trading Commission (CFTC) on Friday.

The futures data indicates the speculators are the least bearish on BTC since the futures listing back in December.

A negative total represents net short positions (bearish bets) and a positive tally indicates net long positions (bullish bets).

The sharp drop in the bearish sentiment, as represented by the steady decline in the net short positions from the high of -1945 seen ten weeks ago to -1266, adds credence to the signs of bearish exhaustion indicated by BTC’s defense of $6,000 since mid-June.

At press time, BTC is changing hands at $$6,715 on Bitfinex.

Weekly chart

As seen in the above chart, BTC printed lows below $6,000 three times in the last ten weeks, but the drop was short-lived, that is, all three weekly candles closed (Sunday’s close as per UTC) above the psychological mark.

So, it seems safe to say that for BTC, the path of least resistance is on the higher side. The short-term technical charts are also echoing similar sentiments.

Daily chart

The upward sloping 5-day and 10-day moving averages (MAs) indicate a short-term bullish setup. Further, the 50-day MA is about the cross the 100-day MA in a bull-friendly manner.

4-hour chart

The ascending trendline and the rising 50-candle MA and 100-candle MA favor a move higher toward $7,000.

That said, BTC’s inability to cross the psychological hurdle of $6,800 over the weekend is a slight cause for concern. However, only a break below the channel support, currently seen at $6,600, would abort the short-term bullish view.

View

  • The bearish net positions in the bitcoin futures markets hit a record low last week, validating the argument put forward by the technical charts that the cryptocurrency has likely bottomed out around $6,000.
  • A break above $6,800 (psychological resistance) would bolster the already bullish technical setup and would open the doors to $7,000.
  • A move below the ascending trendline seen in the 4-hour chart would weaken the bullish case and could yield a drop to $6,230 (Aug. 20 low).

Disclosure: The author holds no cryptocurrency assets at the time of writing.

Bitcoin image via Shutterstock; Charts by Trading View

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CME Futures Partner Releases First Regulated Bitcoin Cash Futures

Cryptocurrency trading platform Crypto Facilities has added Bitcoin Cash (BCH) to its list of futures products, announcing in a press release that the product would go live at 4PM BST Friday, August 17.

Crypto Facilities, which rose to prominence when it partnered with CME Group on its first-of-its kind Bitcoin futures in December 2017, said the move reflected Bitcoin Cash’s status as a “top five coin” by market cap.

The platform already offers Bitcoin (BTC), Ripple (XRP), Ethereum (ETH) and Litecoin (LTC) futures.

“We are pleased to be expanding our cryptocurrency derivatives offering with the launch of [Bitcoin Cash] futures,” CEO Timo Schlaefer commented in the release.

“BCH is a top five coin with a market capitalization of around $10 billion […] and we expect our new contracts to spur the evolution of the crypto markets by bringing greater liquidity and transparency to the digital asset class.”

Prospective investors will now be able to gain exposure to BCH in what reportedly constitutes the first FCA-regulated futures options for the cryptocurrency.

The move comes at a time when Bitcoin Cash is receiving mixed press attention over purported plans by mining giant Bitmain to perform an Initial Public Offering (IPO) in the near future.

The company had traded almost all its Bitcoin holdings for Bitcoin Cash, leading many commentators to raise concerns over giant liquidity problems due to BCH’s relatively illiquid trading market.

Meanwhile, developers this week released a new protocol allowing the release of Initial Coin Offering (ICO) tokens on the Bitcoin Cash network.

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UK Crypto Futures Exchange Adds Bitcoin Cash Contract

Crypto Facilities, the U.K-based crypto futures exchange and CME Group partner, is adding a bitcoin cash product to its offerings.

The firm announced Friday that it was launching the contract on its platform, which is regulated by the U.K. Financial Conduct Authority. Trading of the bitcoin cash future will begin at 4 p.m. British Standard Time (BST).

The contract joins the company’s existing bitcoin, ethereum, XRP and litecoin futures contracts. Investors can take long or short positions on bitcoin cash, “allowing them to broaden investment opportunities and hedge risk more effectively,” according to the company.

Crypto Facilities CEO Timo Schlaefer told CoinDesk that “bitcoin cash is a top-five cryptocurrency by market cap so it was a logical next step to add BCH to our BTC, ETH, XRP and LTC futures offering.”

Schlaefer predicted that the offering would be popular with its customers, based on past interest in its other crypto futures, going on to say:

“We have seen volumes as high as $180 million in a 24-hour period and have average daily volumes ranging from $20–60 million notional per day. We expect BCH to be as successful as our BTC, XRP, ETH and LTC futures that all trade in significant volume.”

“Since 2015 we have seen a steady increase in volume in the cryptocurrency derivatives space, with the past year seeing the highest growth so far,” he added.

While Crypto Facilities does not have a U.S. branch, the firm partnered with CME Group to launch the latter firm’s bitcoin futures contract last December.

To that end, Crypto Facilities powers two bitcoin price indexes – the CME CF Bitcoin Reference Rate and CME CF Bitcoin Real Time Index – that underpin CME Group’s futures product.

Graph image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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OKEx’s Future Trading Shortfall ‘A Valuable Lesson’ for Cryptocurrency Exchanges

The world of futures trading in Bitcoin for the traditional investor is still very new, as it only opened in December of last year when CBOE and CME launched their products to the market in what was expected to be a big boost for Bitcoin adoption.

However, for those already involved in cryptocurrencies, there have been opportunities to trade Bitcoin futures — along with other cryptocurrency futures — since before the big CME and CBOE launch dates. In fact, OKEx announced its BTC, BCH and ETH futures trading on November 3, 2017.

But, even with this jump on the futures market, and being the second-largest cryptocurrency exchange by volume, OKEx has had its issues with futures trading thus far. First, there was abnormal pricing on March 30 which they had to deal with, bringing with it a threat from a trader that they would attempt suicide if the issue was not resolved.

Then, in May, OKEx had to deal with China National Radio’s (CNR) “Voice of China” program that alleged that OKEx was illegally trading cryptocurrency futures in the country, which has essentially banned all usage of digital currencies within its border.

Now, on August 3, OKEx was faced with a sticky situation in which a ‘Whale’ trader’s wrong-way bet on Bitcoin forced a liquidation of a futures contract, forcing other traders to foot the bill. The latest issue means that those with unrealized gains on their short positions this week are set to lose 18 percent of their profits.

Speaking to Cointelegraph, OKEx head of operations, Andy Cheung, said that this has been a “valuable lesson” for him and OKEx, as they continue to try to improve the trading experience. However, Cheung also admits that there has not been too much fallout from their clawback mechanism, nor damage to the futures trading sentiment.

One trader’s bad decision

Cheung put this forced liquidation of a misfired Bitcoin futures trade — with a notional value of $416 million — down to “merely a bad decision of a trader.”

On July 31, an anonymous trader triggered OKEx’s risk management alert system when a long position was placed that contained a massive 4,168,515 contracts. Due to the sheer size of the position, the exchange contacted the trader and asked several times to “partially close the positions to reduce the overall market risks.”

“However, the client refused to cooperate, which [led] to our decision of freezing the client’s account to prevent further positions [from] increasing. Shortly after this preemptive action, unfortunately, the BTC price tumbled, causing the liquidation of the account,” the official statement read.

The ramifications of this liquidation means that counterparties are being left to foot the bill, due to what is known as a “socialized clawback” policy for cases where a trade shortfall occurs.

OKEx have a well-defined policy as to what is done when a forced liquidation occurs, it states:

“OKEX Futures uses a ‘full account clawback’ system to calculate the clawback rate. The system’s margin call losses from all three contracts will [be] merged and clawbacks will be calculated according to each user’s entire account profit, instead of calculating each contract’s margin call loss and clawback separately. Only users that have a net profit across all three contracts for that week will be subject to clawbacks. Clawbacks will only occur if the insurance fund does not have enough funds to cover the system’s total margin call losses.”

In order to try to mitigate some of the losses, OKEx immediately pumped 2,500 BTC (around $18.5 million) into an insurance fund. However, this was not enough to cancel out the damages.

Despite this negative instance for futures trading in Bitcoin, as well as the expenses that the counterparties are left to foot after this anonymous trader’s “bad decision,” Cheung says there was not much lasting damage done.

“From our data, we do not see any signs of the market sentiment being affected by this incident. We also do not see any signs of our customers’ sentiment being greatly affected.”

Learning a lesson

While a lot of what happened fell a bit outside of OKEx’s control, such as the outlandish trade and the volatile movement of Bitcoin that forced the liquidation, OKEx says it was a valuable lesson for themselves, but is also encouraging futures traders to understand the mechanisms.

“We would say this is a valuable lesson for us in improving our trading experience. We always encourage our customers to study the mechanism behind futures trading before joining the game to avoid unexpected losses.”

The clawback mechanism is one which seems to be a bit of an unknown danger for futures traders who rush into things. However, OKEx has made it abundantly clear that this is the price to pay in certain, unfortunate circumstances.

Cheung explains:

“The clawback mechanism has been running orderly since [it] launched, and it is widely adopted by major exchanges around the world. Another major exchange that provides margin trading, BitMEX, also adopts a similar auto-deleveraging mechanism, which closes liquidation orders by deleveraging counterparties’ positions by profit and leverage priority.

“We believe this mechanism balances the interests between all parties involved. Not only does this mechanism stabilize our platform’s operations, but also insures traders’ assets on our platform. Without this mechanism, any trading platform will risk shutting down along with all the traders’ assets.”

Still, it is an unfortunate thing for traders to have to deal with because of one bad move by one other trader, and because of that, Cheung adds, they are trying to make these less frequent, and less costly.

“That being said, we are taking efforts to eliminate the risk of large-scale clawback in the future. We have already launched a series of enhancement measures before this incident happened. We will also enhance the education of futures trading for our users, so that they can fully understand the mechanism behind it and will be able to make well-informed decisions.”

Long road to go

Futures trading in Bitcoin, as well as other cryptocurrencies, still has a long road to go before it can be considered totally fail-safe — and even then, there are bound to be mishaps. However, like Cheung says, there are lessons to be learned as the trading option matures in this new and volatile space.

Bitcoin is still a very new asset class, relative to others that are used in futures, and as such, traders are still in the experimental stages. It will take some time to iron out issues that crop up in this new form of trading, but by trying to mitigate the losses, it should be a relatively painless process to get Bitcoin futures operating smoothly.

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A UK Exchange Is Launching Litecoin Futures Trading

U.K.-based cryptocurrency futures trading platform Crypto Facilities is launching a litecoin (LTC) derivative product.

According to an announcement on Wednesday, the new U.S. dollar-denominated service will go live on Friday, June 22, and will allow investors to long or short futures contracts that have litecoin as the underlying collateral, with weekly, monthly and quarterly maturities.

Timo Schlaefer, CEO of Crypto Facilities, said the decision is a result of having received “strong client demand” for litecoin contracts. “We believe our LTC-dollar futures contracts will increase price transparency, liquidity and efficiency in the cryptocurrency markets,” he said.

Litecoin creator Charlie Lee commented in the announcement that, by opening up litecoin trading to more institutional investors, the new product would increase the cryptocurrency’s liquidity and “make it easier for people to get in and out of litecoin.”

The move comes just a month after the firm launched ethereum-based futures contracts and marks a new addition to several crypto-based derivative products that are already being traded on the platform, including bitcoin and XRP, the native token of the Ripple protocol.

In an email response, Crypto Facilities told CoinDesk that the firm is expecting the trading volume of its ethereum futures contracts to reach around $150 million in this quarter, accounting for around 10 percent of the platform’s total.

Litecoin image via Shutterstock

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SEC Has Removed 'Stumbling Block' for Ether Futures, Says Cboe

Cboe Global Markets may now be close to launching an ether futures product, following a recent comment from a U.S. Securities and Exchange Commission (SEC) official indicating that the agency doesn’t consider ethereum’s native cryptocurrency a security.

On Thursday, the SEC’s director of corporation finance William Hinman notably said that, based on his understanding of “the ethereum network and its decentralized structure, current offers and sales of ether are not securities transactions.”

The news was today welcomed by Chris Concannon, president and COO at Cboe, who said in a statement that the exchange is “pleased with the SEC’s decision to provide clarity” around the issue – a cloud that has been hanging over ethereum since April, when a former regulator suggested that ether and the Ripple-linked cryptocurrency XRP were both securities.

Concannon continued to say:

“This announcement clears a key stumbling block for ether futures, the case for which we’ve been considering since we launched the first bitcoin futures in December 2017.”

In previous comments this past December, Concannon also suggested the Cboe might also launch bitcoin cash futures sometime in the future.

Ethereum futures are already live on another platform – the U.K.-based startup Crypto Facilities launched the product last month. Crypto Facilities is notably a partner with CME Group, and is powering the latter’s Ether Reference Rate Index. A similar bitcoin index helped CME launch bitcoin futures last year.

After news of Hinman’s comment broke, the price of ether spiked around $70 to over $520, though by press time it had returned to $494.

Ether and U.S. dollars image via Shutterstock

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Indonesian Regulator Gives Green Light for Crypto Futures Trading

Indonesia’s Futures Exchange Supervisory Board (Bappebti), a commodities market regulator under the country’s Ministry of Trade, has reportedly ruled that cryptocurrencies are commodities that can be traded on the country’s futures exchange.

According to a Jarkata Post report on Monday, the agency’s market supervision chief, Dharma Yoga, has confirmed the decision and said the ruling came after a four-month study period that examined the issue.

According to Yoga, the agency has now signed a decree to formalize the decision, potentially clearing the way for the launch of a bitcoin futures product in Indonesia.

Meanwhile, other regulations around cryptocurrency exchanges and related taxation in the country will also be revealed by the country’s central bank and its taxation agency, Yoga said.

The central bank, Bank Indonesia, suggested late last year that it would prohibit bitcoin payments in the country, and subsequently stated it does not recognize the cryptocurrency as a legal payment method. However, it did not mention cryptocurrency exchanges at the time.

Yoga further indicated that, in order to prepare a comprehensive regulatory framework, the agency is now requesting domestic cryptocurrency exchanges to submit regulatory proposals.

Indonesian rupiah via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.