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Bitcoin Gains Traction amid Steady Growth in Indonesia

Op-ed - Bitcoin Gains Traction amid Steady Growth in Indonesia

Indonesia, one of the world’s most beautiful archipelagoes and travel destinations, has had a consistent increase in bitcoin adoption at popular tourist spots including Bali, Jakarta and Denpasar, since the launch of BitIslands in March 2014.

Initiated by the largest Indonesian Bitcoin exchange Bitcoin Indonesia, the project was sponsored by leading Bitcoin merchant platforms and mobile services in Asia, including a Singaporean startup Coin of Sale, Artabit, CoinPip, Quantified, Tukarcash and Bitwyre. Since 2014, Bitcoin Indonesia continued to aggressively push the project in Bali, where BitIslands launched a bitcoin Information Center and Bali’s first offline Bitcoin exchange.

Due to the increase of bitcoin’s market awareness and merchant adoption, the majority of the locals started to use bitcoin online, and began to appreciate bitcoin’s low transaction fees and speed, The Wall Street Journal reports.

“Most Indonesians currently use bitcoin to pay for services online, such as web hosting. They can also use the digital currency to book hotel rooms through travel websites hosted overseas rather than use credit cards, which only a small percentage of the population currently own,” the Journal article says.

Furthermore, major bitcoin exchanges such as Bitcoin Indonesia have seen a substantial growth in both the number of users and daily trading volumes. The largest bitcoin exchange in Indonesia currently trades around 200 bitcoin daily and supports more than 56,000 users.

“Many people think that Bitcoin is unheard of in Indonesia, but the fact is its popularity is soaring now,” Bitcoin Indonesia CEO Oscar Darmawan said.

In September 2014, several projects emerged to increase bitcoin mainstream adoption in the nation, by allowing Indonesian residents to purchase bitcoin at popular stores or tourist spots. The project ran by Bitcoin Indonesia enabled users of its exchange to purchase bitcoin at any of the 10,000 Indomarket convenience stores via a partnership with iPaymu, a merchant payment platform.

Such services, along with the rising volume of Bitcoin exchanges, influenced Indonesian merchants to accept bitcoin in other parts of Indonesia apart from Bali, where most of the Bitcoin projects began. Currently, Indonesia has more than 50 Bitcoin merchants, and the majority are located in Denpasar.

Rise of Bitcoin Startups

Since early 2015, some Bitcoin startups began to relocate to Indonesia, targeting the poor banking systems and payment infrastructure of the country. One of the startups was Blossom, which recently moved from San Francisco to Indonesia to offer the country’s first bitcoin-based global lending/investing platform.

Blossom connects international investors to small businesses in Indonesia which are ready to launch. Through an established local microfinance institution, Blossom delivers the bitcoin funds to the businesses. After 12 months, profits from the businesses are collected to be distributed to the investors, with around 7.5 percent to 12.5 percent in return.

“In conventional investment, I have to rely on the statements and numbers publicized by my partners. With Bitcoin, it’s clear to everyone what’s going on,” said founder Matthew Martin.

As the number of bitcoin merchants and trading volumes continue to grow at a consistent rate, Bitcoin startups and establishments, including Bitcoin Indonesia, aim to achieve mainstream bitcoin adoption in popular tourist spots in the country.