Joint venture would allow Binance access to the fast-growing Indonesian market, with institutional support from the nation’s largest bank.
Bloomberg is reporting that Binance is in talks with PT Bank and its controlling family to set up a joint venture in country
Indonesians have shown exceptional enthusiasm for digital assets, as the national stock exchange with its plethora of state-owned enterprises and other lethargic forms no longer excite investors
Sensing a market opportunity in Indonesia, where crypto traders outnumber equity investors, Binance is said to be in discussions with Indonesia’s richest family to create a local version of its exchange in-country in conjunction with the family’s bank and telecom.
According to Bloomberg, the exchange is in discussions with the Hartono family, which controls PT Bank Central Asia and PT Telkom Indonesia. Bloomberg says the talks with Binance would likely involve both companies as Indonesia is increasingly a mobile-first economy, with many of the new middle class eschewing a PC in favor of a smartphone.
Binance is said to already have an investment in Tokocrypto, one of the country’s largest exchanges that’s considering an IPO in 2022.
Although Indonesia’s national religious council has declared cryptocurrency to be haram, or forbidden to be used by Muslims, as it is incompatible with Islamic Finance, this ruling isn’t binding as the country is nominally secular in its governance, even as it is the world’s largest Muslim-majority state.
Overall, the government has been supportive of the asset class. The Indonesian Trade Ministry Futures Exchange Supervisory Board gave crypto the green light as an asset class in 2019, while prohibiting its use as a payment mechanism.
The country is home to three stablecoins denominated in Indonesian rupiah: XIDR, from StraitsX, which also has a Singapore dollar denominated stablecoin, and Binance IDR, used primarily on the Binance-backed Tokocrypto exchange as well as the RupiahToken.
This report from Bloomberg follows a broader trend of banks in Asia setting themselves up for exposure to digital assets. Rules enacted earlier this year in Korea require exchanges to partner with local banks to ensure KYC and tax compliance, starting an investment frenzy in-country. In Singapore, DBS opened up an institutional trading desk for crypto while in Thailand local bank SCB bought a majority stake in Thai exchange Bitkup.
Binance did not comment publicly on the report.