Indonesia may be breaking new ground as a global adoption leader.

Comment by Mohammed Alkaf Alhashmi, Co-Founder of Haqq Network

The world has now embraced the evolution of Web3. Meanwhile, in Indonesia, the Web3 revolution is anything but underway. With impressive crypto adoption, a young, tech-savvy population and a supportive regulatory environment, Indonesia is poised to become a global leader in Web3 innovation in the coming years. As the domestic market grows, however, more solutions must be found that fit the unique cultural and ethical values ​​of the Indonesian people.

Revolution in numbers

Indonesia boasts some of the most significant growth numbers globally in the crypto market. The country is ranked third in the Chinalysis Global Crypto Adoption Index, trailing only India and Nigeria. Indonesia's Crypto Industry Between 2023 and 2024, it is projected to be worth $157 billion, making it the leader in Central and South Asia and Oceania. The country's crypto market is one of the fastest growing in the region, growing nearly 200% year-on-year.

Latest: Indonesia's Cryptocurrency Transactions to Cross $30B by 2024

A significant portion of Indonesia's crypto market activity is trading. In the year In 2024, the country showed interest in crypto transactions and traders, especially memecoins. In particular, most of this amount comes from decentralized products. The share of Indonesia's decentralized exchange (DEX) transactions among all crypto transactions is higher than the regional and global averages (43.6% compared to 27.8% globally).

The Indonesian government's positive stance on crypto supports this development. The regulators recently added to the country's elaborate crypto framework by reclassifying cryptocurrencies from commodities to digital financial assets. Known for its openness to licensing market players, Indonesia's Commodity Futures Trading Regulatory Agency (Bapebti) is set to transfer its regulatory responsibilities to the Financial Services Authority (OJK), bringing greater recognition, improved transparency and reform to the crypto industry. Stronger investor protection.

Crypto is making inroads into other sectors of the Indonesian economy. In the year By 2024, the country's e-commerce sector – an $80 billion industry – has experienced a significant increase in the number of crypto transactions. In addition, crypto offers tangible benefits to many users by reducing remittance fees: every year, Indonesians save up to $300 million in remittances.

Moving more than 8%

For many Indonesians, crypto serves as a store of value and the best way to make cross-border payments. As people become familiar with simple crypto products, they embrace complex mechanics such as product farming and staking. These serve as an easy gateway to financial aid for Indonesians, especially the younger generation.

Indonesia has a very young population – 10-19 year olds form the largest demographic group in the country and will soon be (and are) involved in the financial system. Meanwhile, one-third of Indonesia's 277.5 million people remain unbanked. These new economic participants are turning to crypto instead of traditional financial products, which even their parents often have no access to. That represents a unique investment potential for anyone entering the Indonesian Web3 market.

Despite Indonesia's global leadership in crypto adoption, the country's reported number of crypto users is now only 21.3 million, which is less than 8% of its population. In order to maintain leadership and embrace the remaining 92%, the industry must develop a variety of crypto use cases and solutions tailored to the country's unique cultural and ethical ecosystem.

With 87 percent of Indonesian citizens claiming to be Muslim, their financial behavior is influenced by Islamic principles, placing special requirements on the services they use every day. While the traditional economy offers many such products, the crypto market should seek to provide Indonesians with solutions they can use without compromising Islamic values.

First, these may include Sharia-compliant solutions. Interest is prohibited in Islamic finance, which restricts the ability of Muslims to borrow, lend and provide money. Decentralized financial platforms for Islamic banks can solve this by providing financial instruments that comply with Islamic values. Blockchain-based zakat (charity) distributions add transparency and efficiency to Islamic donations.

Second, educational initiatives focused on localized Islamic finance can demystify cryptocurrency and address common concerns around ethics and security, especially among older generations and rural areas where skepticism about digital assets may be heightened.

Third, as the connection between crypto and fiat economies is a growing global trend – and Indonesia is no exception – cooperation with local institutions provides additional impetus. Partnering with Indonesian banks, regulators and fintech startups will help create hybrid solutions that integrate traditional financial systems with blockchain technology.

Finally, the industry must focus on real-world use cases. Crypto adoption could reach new heights if additional products meet local needs, such as cross-border money transfers, certificates or decentralized microfinance for small businesses.

Ethics-first solutions can address the financial needs of a wide Indonesian audience and introduce the world's fourth largest population to the benefits of the crypto economy. This will help unlock further industrial growth in Indonesia and maintain the country's leading position globally.

It has long been recognized that digital assets find particular interest in developing countries, where people struggle to access traditional financial instruments or seek ways to cope with inflation. Indonesia is a good example of how this passion can produce amazing results when channeled in the right direction. With its regulators taking a pro-crypto stance, the country is leading the global Web3 revolution, challenging the dominance of established international crypto hubs.

Mohammad Alkaf Alhashmi is the co-founder of Haqq Network. Mohammed has over 18 years of experience in computer science and engineering, specializing in Industry 4.0, Artificial Intelligence, Machine Learning, Industrial Automation and the Internet.

This article is not intended for general information purposes and should not be construed as legal or investment advice. The views, ideas and opinions expressed herein are solely those of the author and do not necessarily represent the views and opinions of Cointelegraph.