Xepeng Regulatory Compliance
Understanding how Xepeng operates within Indonesian legal framework
Xepeng in the Eyes of Indonesian Regulators
Xepeng is not a digital assets transfer service, but rather a digital asset conversion platform that complies with the Currency Law and all Bank Indonesia regulations. Xepeng is an official Rupiah-based digital assets conversion provider, not a foreign transfer instrument, not a digital assets wallet, and not an entity competing with the Rupiah.
1. Compliant with the Currency Law
Law No. 7/2011 concerning Currency states:
"The only legal tender in Indonesia is the Rupiah."
Xepeng never processes digital assets as a means of transfer. Xepeng only processes the conversion of digital assets into Rupiah. After conversion, transactions are conducted entirely in Rupiah through national banks.
We ensure that Xepeng:
- ✓ Does not replace the Rupiah
- ✓ Does not create a parallel transfer system
- ✓ Does not trade digital assets as a means of transfer
Xepeng only acts as an intermediary for value conversion, such as a remittance service that converts USD into Rupiah before the money is handed over to the recipient.
2. Collaborate with an Official Crypto Exchange
Crypto asset trading in Indonesia is regulated by the Financial Services Authority (OJK) and requires transactions to be conducted through registered exchanges. Therefore, Xepeng's strategy of entering the official ecosystem further strengthens Xepeng's position.
Collaborate with:
- ✓ The party that manages digital assets trading
- ✓ The party that ensures KYC/AML compliance
- ✓ The party that legally converts digital assets into Rupiah
Xepeng never engages in exchange activities. Xepeng only uses the Rupiah conversion proceeds from official exchanges and distributes them to the recipient's bank account. Xepeng operates on the "Rupiah-only" side.
3. No Crypto Wallet for the Recipient
The recipient of an Xepeng transaction:
- ✓ Does not hold crypto
- ✓ Has never transacted crypto
- ✓ Does not need to open a wallet
- ✓ Has never had any contact with digital assets in any form
The recipient only receives net Rupiah in an Indonesian bank account.
Xepeng's activities can be classified as regular non-cash transactions, such as bank transfers or marketplace settlements.
4. Economic Context: SMEs Go Global & Tourism
Currently, there is a global problem:
- ✓ Tourists want to pay using crypto, but Indonesian businesses are not allowed to accept digital assets as direct transfer
- ✓ Exporting MSMEs need access to affordable global transfers and clear channels
- ✓ Tourism (especially Bali) is full of transactions by foreign tourists who now use crypto
Xepeng supports SMEs and the local tourism industry. Therefore, we propose a solution where digital assets is only accepted upstream and then converted into Rupiah (fiat). The funds are transferred to the receiving bank, thus becoming a legitimate domestic transaction.
5. Anti-Money Laundering & Counter-Terrorism Financing Compliance
Xepeng, as a service that complies with AML and counter-terrorism:
- ✓ Uses official KYC & AML exchangers
- ✓ Records transaction origins
- ✓ Maintains a clear track record of value transfers
- ✓ Does not accept cash, does not accept illegal assets
- ✓ Channels all funds through the national banking system
With this, Xepeng transforms digital assets transactions into transparent, traceable, and compliant with the Indonesian financial system.
6. Not a Payment System (PSP)
Xepeng only facilitates the clearance of value conversions, then hands over the transfer process to:
- ✓ Official exchangers
- ✓ Banks
Xepeng is not an e-wallet, a switcher, an acquirer, or a QRIS provider. Xepeng falls into the value conversion service category, whose role does not overlap with BI's licensing domain.