Indonesia’s markets regulator has declared Cardano’s native token ADA as a commodity, signalling a significant milestone in the global cryptocurrency arena.
Through an amendment to the country’s former Trade Controlling Agency Regulations Commodity Futures Number 11 of 2022, on June 9, Bappebti, the agency responsible for regulating commodity futures trading in Indonesia, classified over 450 cryptocurrencies, including Cardano (ADA) as commodities, allowing them to be traded within established regulatory frameworks.
According to the document’s preamble, extensive evaluations were conducted before listing the cryptocurrencies, considering utility, functionality, and intrinsic value within their respective blockchain ecosystems. By subjecting these cryptocurrencies to such scrutiny, Bappebti noted that it aimed to provide clarity and investor protection while promoting innovation and technological advancement in the cryptocurrency space.
Notably, the regulator recognized ADA’s value, given its utility and pivotal role within the Cardano blockchain ecosystem. Cardano’s ADA token holds significance within the Cardano blockchain ecosystem due to its utility and functionality. It plays a crucial role in facilitating transactions, staking, and participating in the governance of the network.
However, Bappebti’s decision to classify these cryptocurrencies as commodities stand in stark contrast to the perspective of the U.S. Securities and Exchange Commission (SEC). The SEC has predominantly categorized ADA and other cryptocurrencies primarily as securities, a stance that was reaffirmed in its recent case against Binance.US, drawing criticism from the cryptocurrency community.
That said, the Indonesian government’s classification of ADA and other cryptocurrencies as commodities reflects a potential powershift in the cryptocurrency landscape, with countries like Indonesia and China embracing and recognizing cryptocurrencies as tradable assets.
Although the West, particularly the United States, has traditionally played a dominant role in shaping technological advancements, experts in the industry have asserted that the East’s forward-thinking regulatory frameworks and embrace of technological innovation may position these countries at the forefront of the next technological revolution, leaving the US behind.
Already, amidst the regulatory crackdowns on US cryptocurrency companies, industry leaders like Coinbase and Gemini have begun looking elsewhere. Recently, Coinbase entered Bermuda, while Gemini seeks a license in the United Arab Emirates. Meanwhile, Bittrex ceased operations in the US in April, saying the US regulatory environment was “not viable” for business.
The Indonesian government’s recognition of ADA as a commodity also opens up possibilities for neighbouring countries to reconsider their regulatory stance on cryptocurrencies. Observing the success and acceptance of ADA in Indonesia, these countries may likewise adopt a commodity-based approach to cryptocurrencies, fostering regulatory clarity, innovation, and investment.