Ananda Badudu is 32 years old, dreamy-eyed and slightly built, someone who rose to fame as an activist and the creator of a gentle, melodic brand of folk-pop. His music — soft synthesizers, mellow guitar — ripples through a dim Jakarta cafe, where he is playing to a room of hushed fans. Though it is difficult to imagine him snarled in a Twitter war or evangelizing in a Telegram group, the quiet indie rocker is a prominent figure in Indonesia’s cryptocurrency scene. 

His belief in crypto was confirmed after his savings were gutted, mid-pandemic, by an insurance scam, Badudu told Rest of World. He wanted to hold his wedding, he said, and it was only when withdrawing money from his account that he saw the funds were shockingly lower than expected. The experience soured Badudu on the whole idea that security and value could be found in the rupiah, or that government support would exist in times of need. He began investing in crypto with just around $20.

“That’s when I realized I didn’t trust any type of conventional, centralized investment anymore,” said Badudu.

Indonesia’s local crypto following has swelled over the past year. Some, like Badudu, are disillusioned with hard currency; many others, ordinary people battered by the pandemic-induced recession, are hunting for ways to turn a quick profit. In 2020, nearly $4.5 billion in crypto assets were traded in the country. By October this year, that shot up more than ten times to around $50 billion. 

The barriers to crypto trading in Indonesia have never been lower. In Indonesia today, all you need to get started buying and trading cryptocurrency assets is a smartphone, an internet connection, and roughly 75 cents. Localized exchange apps like Pintu, Indodax, Luno, and Binance-backed Tokocrypto are suddenly thriving  — tools that connect directly to local banking and digital payments platforms, so new users can sign up and start trading immediately. The prospect of quick gains is alluring: Religious figures and influencers have taken to the internet to tout the ease of trading, and as Indonesia’s economy has stuttered, the appeal of speculating in crypto has grown, outstripping similar behavior in stocks.

At the same time, the country’s regulators are racing to keep up, and even crypto proponents know that financial literacy needs to match the mounting opportunities. The government has announced plans to set up its own crypto market in 2022. As affirming as the crypto pile-on has been, a crash would be just as damaging.

Over the pandemic, Indonesians have turned to all kinds of investment vehicles, said Antonny Teo, admin of popular investing advice Telegram group Kriptonesian — stocks, mutual funds, and crypto — in the hopes of making any gains to help them ride out the slowdown. “People were lured by the high return of crypto after being flooded by success stories,” Teo told Rest of World. “But let’s not forget crypto has high risk too.” 

Agus Artemiss, the founder of one of Indonesia’s largest crypto-focused Telegram groups, Cryptoiz, first encountered Bitcoin when he competed in a jingle-writing contest on a Russian music platform and was paid in it. His view on crypto is pragmatic.

“People only see it as a way to gain profit,” said Artemiss, whose community has ​​15,000 Telegram members, more than 20,000 Instagram followers, and another group on Facebook. “We still lack crypto literacy.” 

Indonesian social media buzzes with crypto investment chatter. Users post flurries of chart snapshots, exchange opinions on trends, and speculate over the possibility of a “crypto winter.” Exchange platform Tokocrypto uses the hashtag #SalamToTheMoon, an appropriation of the #ToTheMoon tag made famous by Elon Musk.

Kriptonesian founder Teo said he increasingly sees lower- and middle-income people of varying educational backgrounds joining his investment advice group. “They are the most active, die-hard, and noisy,” Teo told Rest of World. “They monitor the charts daily, and react excessively.” 

Users are also overwhelmingly young: Tokocrypto reports that around 65% of their base is under 35. Young investors have a higher degree of risk tolerance, said Teguh Kurniawan Harmanda, the chief operating officer of Tokocrypto, perhaps because “the young population has more time left in their earthly existence to make up for any potential financial loss.” Tokocrypto launched in 2018, and now counts over 100,000 weekly active traders and $70 million in average daily trading volume. 

Cryptocurrencies themselves are not considered a legal form of payment in Indonesia. You can’t pay for nasi goreng or buy a house with Bitcoin, but you can hold it as an asset, and trade it via a cryptocurrency exchange. In 2018, there were just two of these operating in Indonesia; as of this year, Indonesians can buy them on 13 different officially-registered exchanges.

For his gateway buy of $20 worth of Ripple’s XRP coin, the musician Badudu used Indodax, which claims to be the country’s largest exchange by number of users. In a matter of days, he said, his investment soared by 300%. Within a month, though, the coin’s value had plummeted back to its starting price. 

It is this volatility that lures new investors with the possibility of quick gains — and worries regulators over the risks of speculation and instability. Pintu and Indodax operate “academy” sites dedicated to educating users about the basics of trading. While Indodax’s site features a glossary of common cryptocurrency terms, Pintu’s is a compendium of explainers digging into  everything from stablecoins to Bitcoin mining. “Pintu,” in Bahasa, means “the door” — a reference to the frontiers of fintech now available to Indonesians.

“People only see it as a way to gain profit.”

“It’s very daunting for a user to get into crypto,” Pintu founder Jeth Soetoyo told Rest of World. “Trying to understand the whole technical stack and what it actually does can be very challenging.” His aim, he said, is to make it as simple as possible for users to understand the risks to start investing. On the company’s social media channels, potential users are constantly asking about the basics of crypto and investing, which the company tries to answer as straightforwardly as possible in order to grow a lasting user base.

Users need some level of literacy to understand how to use these crypto exchange apps — or at least take an interest in concepts like smart contracts and digital wallets. Similarly, for Tokocrypto COO Harmanda, it is a necessary trade-off for “the ordinary man on the street in Indonesia.” “We were able to open the door for the masses to the world of financial investment, which is a domain that [previously] … was largely closed.” 

No single agency is charged yet with overseeing emerging fintech: electronic payments platforms like GoPay fall under the financial regulator Financial Services Authority, or OJK, but crypto assets are overseen by the Commodity Futures Trading Regulatory Agency, or BAPPEBTI.

The proliferation of cryptocurrencies has dizzied regulators. Coins based on internet memes — like Dogecoin and Shiba Inu — have skyrocketed in value with BAPPEBTI running to catch up. The agency maintains a continually-updated list of officially recognized crypto assets — 224 of them at last count, which includes the usual suspects like Bitcoin, Ethereum, and Tether, as well as tokens for PancakeSwap, Abyss, and something called “PlayGame.” Official recognition is supposed to protect the millions of Indonesians who are buying and trading these currencies daily. If a nefarious nonfungible token (NFT) dealer in Jakarta steals a Dogecoin, they can technically go to the police — if they can prove it happened.

Badudu himself has lost over $1,000 in crypto trading so far, the equivalent of about four months’ minimum wage in Indonesia. He described it, in a circumspect way, as “a learning fee.”

How cryptocurrencies transition out of the unregulated fringes of the internet not only impacts the financial future of Southeast Asia’s largest economy, but potentially serves as a blueprint for other countries confronting how to regulate the burgeoning industry. 

Charles d’Haussy, a former Hong Kong government official and head of Asia-Pacific at the blockchain software company ConsenSys, told Rest of World that strong fintech companies could collide with the authority of the government, and both may seek to maintain their own tokens. “In this market, the pace of fintech has been very similar to what we’ve seen in China,” said d’Haussy. “Eventually, you end up with markets which are dominated by a handful of players, which brings a systemic risk later on to the central banks. Exactly what we’ve seen in China.”

Now that the Pandora’s box of borderless, decentralized exchanges has been opened, Indonesians are going to be using them anyway, said Pandu Sastrowardoyo, a co-founder of the Indonesian Blockchain Association who spent six years working on IBM’s Indonesia team. She spoke to Rest of World on the last day of the crypto conference NFT.NYC, where she was the only guest speaker from Indonesia. “The only way you can monitor the exchanges is by making them legal,” she said. 

Although the Indonesian government has banned cryptocurrencies as a form of payment, and the powerful Indonesian Ulema Council has said paying with crypto is not permissible under Islamic law, the country still regulates crypto as an approved asset class. Crypto businesses operate in a legal grey area in much of the world, but this means that in Indonesia, the surest option is to be an officially registered exchange — although hubs like Singapore have been striving to make themselves more attractive to those fleeing China’s crackdown

Ordinary Indonesians have much at stake, but right now the loudest voices belong to the sellers and idealists. The musician Badudu has always had a soft spot for revolutionaries. After all, he named his original group Banda Neira, for the eastern island where several of the men who became Indonesia’s founding fathers were exiled by the Dutch colonists. “If we look the other way to challenge the status quo, there’s hope within the crypto world,” he said.

“Crypto is like a self-fulfilling prophecy,” Soetoyo of Pintu said to Rest of World. “The more you believe in it, the more it will happen.”