Posted 2 years ago | by Ben Armstrong
Binance Makes Investment in Tokocrypto – Indonesian Crypto Exchange
Binance is making inroads to the Indonesian crypto market by making an investment in the Jakarta-based and regulated exchange, Tokocrypto. The amount of the investment wasn't disclosed, but Binance is one of the most prominent token exchanges in the world.
According to a recent announcement, Binance disclosed that the funding would support Tokocrypto's growth, and include funds for building out new offerings and products, expanding its customer base, and also improving its tech stack.
Tokocrypto was launched in 2018 and was the first exchange that was regulated by Indonesia's Commodity Futures Trading Regulatory Agency (BAPPEBTI) in 2019.
Binance Enters Indonesia
In Indonesia, digital assets like cryptos are outlawed as a means of payment. Early this year, new regulations were passed that allow people to trade crypto derivatives. However, these exchanges require investors to put up high minimum deposits to get started.
Cryptocurrency trading appears to be flourishing in the world's fourth most populous country amid the slight relaxation in laws that allow it to exist. Industry sources speaking to Reuters in February said the local crypto market is the same size as the country's stock market although there is no independent data showing this to be the case.
The decision to ban cryptos by Indonesia's government is a strange one. While it is a very large country, it is also extraordinarily poor. Many of its citizens simply can't afford access to banking services, which means they end up using more expensive kinds of financial services, or the black market.
CZ is Positive on the Move
Binance’s founder and CEO, Changpeng Zhao, or CZ commented:
"Indonesia will become one of the leading centers of the blockchain ecosystem in Southeast Asia. Our investment in Tokocrypto will allow us to explore exciting new opportunities together for the Indonesian market with a regulated local partner to further enable the freedom of money."
The first major offshore exchange which has moved into Indonesia is Rival Huobi, with its launch of a local entity back in 2018. Binance added the local rupiah currency to its peer-to-peer platform in April of this year but hasn't entered the market directly.
Binance is applying a different strategy in Indonesia by investing in a regulated exchange, that brings to Binance exposure to the promising Indonesian crypto industry. This strategy removes regulatory hurdles that it would face if it went for a full-blown presence in the country.