Indonesia Bitcoin & the unbundling of the remittances market 

So far we have looked at relatively small countries in our Alternative Bitcoin Capital tour. Indonesia is not small however you cut it:

  • population; 256 million (close to America in size)
  • GDP #16 in world between Mexico and Netherlands.

Indonesia is exciting for business because of those Asian GDP growth rates – at 5.8% this is almost double most countries in the West.

This is the story that prompted me to find out what is happening with Bitcoin in Indonesia.

“Residents of Indonesia can now buy and receive bitcoin over the counter at over 10,000 ‘Indomaret’ convenience stores around the country.

The project was developed on the initiative of Bitcoin Indonesia and will run through its exchange in partnership with payment processor iPaymu.”

That matters because of Remittances. Jakarta Post has the details:

“Indonesia received US$7.2 billion from around 6.5 million migrant workers overseas in 2012, the World Bank said in a recent report.

The figure was equal to about 1 percent of the nation’s gross domestic product, making Indonesia the third-largest recipient of remittances in Southeast Asia”

If you remit via Bitcoin, those 10,000 stores are your off ramp where the recipients can get Indonesian Rupiah for spending. It is a natural for the Indomart stores – they get foot traffic.

Read that and weep Western Union.

We are seeing the unbundling of the remittances market:

  • the on ramp are Bitcoin ATMs where you put in Fiat and get back Bitcoin.
  • transmittal is via the open Bitcoin network.
  • the off ramp is via mass market retail in the recipient country, which is where the Indomart story is significant. This is like M-Pesa but better (more open and permissionless).

From a single company/brand controlling the end-to-end experience, Remittances is becoming unbundled to an ecosystem.


  1. Bernard, I guess the volume of of transactions is still a small part of the 1% of GDP that are Bitcoin remittance payments, i.e., immaterial for now. But if we jump forward in time, what level of Bitcoin transactions would make it ‘material’ and what impact do you see on the Indonesian Rupiah?

    • Hi Rick, yes I think it is pretty immaterial from a macro perspective but big at a micro level and that is what matters for new venture traction. It is massive for individual families ie will change user behavior. It is big for Remittances ie Indonesia is a big recipient with a few large corridors. How fast this impacts Remittances volumes only time will tell. Bernard

  2. Hi Bernard,
    I live in Indonesa. I am not sure about the news / story that you quoted because as long as we experience here in Indonesia this is not possible as yet.
    Some stories about this has been around since September 2014 and bitcoin Indonesia has already apologize to Indomaret for stating a cooperation with Indomaret without Indomaret approval:

    Here are some links that menttion it:

    Apologize if you have more update story around this and please correct me if I am wrong yah…



    • Wow thanks for this correction. Incredible how “news” gets repeated as fact. I strive to do that but can only do that when somebody like you corrects something in comments. So again, thanks

  3. Using crypto currencies as a means to transfer money internationally is a great idea and is something that will make the banks look carefully at what was previously a closed market. I do have a question however on whether you see any future regulatory hurdles if the volumes increase. For example how do crypto currencies support AML checks. Would this model require indomaret to screen recipients?

    • Look at earlier comment. The Indomaret story maybe false. I think AML rules mostly apply to sender than recipient ie on ramp but if anybody knows better please correct me.

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