2021 Indonesia Cryptocurrency Investor Report Part 3

Broader Applications of Cryptocurrency

8 min readMar 31, 2021

This is the third and final piece of Tokenomy’s 2021 Cryptocurrency Investor Report! We will cover insights gathered from 20k+ users of Indodax on the role that crypto wallets, DeFi, and stablecoins play in the future of the world economy.

Key Takeaways

  • While cryptocurrency still has a way to go to match the widespread adoption and utility of fiat currency, 82.6% of respondents agree that crypto assets are the future of payments
  • The majority of respondents (77.4%) use software wallets to store and access their cryptocurrency. These customers desire convenience and simplicity of use. It is important to build interfaces and platforms that simplify crypto and increase adoption among Millennials and Gen Z moving forward
  • Decentralized exchanges (Uniswap, SushiSwap, etc.) have been used by 15.2% of respondents — DeFi platforms have high potential in a variety of domains, but they have yet to capture widespread usage
  • Stablecoins are seen as important to the future of cryptocurrency trading and payments for their stability relative to fiat currencies

Crypto as the Future of Payments

Photo by Austin Distel on Unsplash

One of the first questions that many ask as they start to dip their toes into the world of cryptocurrency is:

What utility does bitcoin have? In other words, what can it be used for, besides as a digital store of value?

The following are a few examples of what can be done with fiat money, such as U.S. Dollars or Indonesian Rupiah:

  • Accepted in return for pretty much all goods — running shoes, food, a car
  • Transferred from peer to peer domestically and internationally
  • Loaned in exchange for interest payments

Bitcoin and other cryptocurrencies have some utility similar to fiat money:

Cryptocurrencies have started to close the gap on traditional currencies in terms of expected utility and usage levels — a recent estimate puts the number of individuals who own crypto in the US at 10% of the population — and our data shows that the Indonesian market is confident in crypto’s potential to displace traditional financial systems.

What will the future of payments look like? Many respondents feel confident that crypto assets will play a big role: 82.6% strongly agree or agree that crypto assets are the future of payments.

Respondents are very bullish on crypto as the future of payments.

A key to this confidence in the ability of crypto to reshape payments is the clear need for alternative payments infrastructure in Indonesia. Even in 2021, a third of the Indonesian population remains unbanked. Crypto assets fill that void by providing access to permission-less payments to anyone with an Internet connection. Zooming out, Southeast Asia provides an ideal location for crypto assets to take off:

  • The 650 million people living in SE Asia use a number of distinct currencies, and do not possess a unified financial system like Europe or the U.S.
  • Remittance flows rose 43% in 2020 to $15 billion, projected to reach $35 billion by 2025; Digital payments are expected to grow to $1.2 trillion by 2025
  • SE Asia added 40 million new internet users in 2020 alone, to 400 million

As for personally wanting to do peer-to-peer transfers to family and friends — the crypto equivalent of services such as Venmo, Paypal, or Alipay — the sentiment is still bullish, but with a stronger contingent of “neutral” responses.

Bullish sentiment regarding P2P transfers, but with a stronger “neutral” contingent.

Network effects are certainly at play here: the more people that understand how crypto assets work and adopt them, the easier it will be to engage in activity such as peer to peer money transfers. While it may be hard for some to imagine sending money to a parent who understands very little about crypto assets, this will likely change with wider adoption and simplified interfaces.


Given the decentralized nature of blockchain, there is no one bank or entity that is responsible for an individual’s crypto account. Instead, access to each account is granted based on a public address, a 26–35 character code that may start something like: bc1qm2f25… and a private key, which is similar to a password.While crypto wallets do not hold currency, they essentially hold encrypted keys that allow a user to access and send the balance held by a specific public address.

Software vs. Hardware Wallets

Your wallet’s private keys can be stored in two different ways. Software wallets come in the form of software downloaded to your computer or phone, such as Coinbase Wallet or Exodus. They can also be online wallets, accessed from anywhere with an internet connection. Typically these “hot” wallets are quite convenient to access and allow a user to easily send smaller amounts of crypto.

Hardware wallets or “cold” wallets are physical devices not connected to the internet, such as Trezor. They securely store private keys offline, so are more secure and suitable to store larger amounts of crypto assets.

The strong majority (70.4%) of respondents feel familiar with the distinction between hardware and software wallets.

70.8% of respondents are familiar with hardware and software wallets.

When it comes to making a choice between the two, it seems that the convenience of software wallets have won over many Indonesian respondents: a resounding 77.4% replied yes when asked if they only store their crypto assets in software wallets.

Hardware wallets can be a bit of an investment and take more effort to interact with, so it is understandable that individuals with fewer assets or those more comfortable just using apps on their phone would not take the further step of storing their private keys on a hardware device.

This underscores a broad theme. In our first report, we described how most of the survey respondents were in the 20–30 year old age range — a tech-savvy generation that expects simple, stylish interfaces, and easy to use platforms. While some platforms are making a push to bring crypto assets closer to other apps that this generation knows — Coinbase’s wallet using Venmo-like usernames, for example — there is still room to build digital interfaces and platforms that simplify crypto. Moving forward, it will be important to think about bridging the gap between the fairly perplexing crypto world and a generation that grew up with Facebook, Instagram, and Whatsapp.

DeFi and Loans

DeFi, or “Decentralized Finance” refers to blockchain protocols that facilitate financial activities including trading, borrowing and lending services without requiring middlemen. It draws inspiration from the way in which blockchain removes the need for a bank to mediate transactions, and applies this idea to loans, exchanges, prediction markets, crowdfunding, and more.

One of the first DeFi applications, Maker, launched decentralized stablecoin pegged to the US Dollar called Dai. It was launched in late 2017, and numerous other DeFi projects built on the Ethereum blockchain soon followed. In order to measure the total amount of participation and growth of these DeFi applications, the concept of TVL (total value locked) emerged. It is a measure of the total amount of value locked up on these platforms as collateral — something all DeFi applications share in common. By visiting DeFi Pulse, you can observe the rapid ascent of DeFi in the past year or so: from $692 million TVL in January 2020 to $50 billion in April 2021.

A few examples of major players in the DeFi Lending and Prediction Markets areas.

Based on our data, DeFi is an area that still has yet to achieve adoption in the way that prominent cryptocurrencies have. 17.3% of respondents own DeFi tokens, with the top being:

  • yearn.finance (YFI): a platform that aggregates lending, yield, and insurance on the Ethereum blockchain
  • SushiSwap (SUSHI): an automated decentralized exchange
  • Uniswap (UNI): similar to SushiSwap, the first decentralized exchange

Diving deeper into DeFi applications, we asked the following:

  1. Have you traded on a decentralized exchange (DEX) before? Yes: 15.2%
  2. Have you borrowed from / lent to a DeFi liquidity pool? Yes: 3.8%
  3. Have you borrowed / lent Crypto Assets before? Yes: 5.8%
The number of respondents that had traded on a DEX such as Uniswap or SushiSwap far outnumbers those that have borrowed/lent to a liquidity pool or borrowed/lent crypto assets.

While about 1 in every 7 of our respondents has used a decentralized exchange like SushiSwap and Uniswap to trade crypto, borrowing/lending crypto assets and contributing to DeFi liquidity pools has been done at a much lower rate.

Another valuable application of DeFi has been the advent of stablecoins — tokens aimed at decreasing volatility by being pegged to the value of a specific fiat currency. 30.1% of respondents feel that they would borrow more crypto assets if the loan could be denominated in IDR-based stablecoin.


The top three stablecoins by market capitalization are: Tether (USDT), USD Coin (USDC), and Binance USD (BUSD). All three are tied to the US Dollar, and allow users to send and utilize a digital currency without worrying about potential fluctuations in its value. This can be helpful in a variety of contexts. For example, in November 2020, USDC was used to distribute support to medical workers and others in Venezuela amidst political instability and high inflation.

87.7% of respondents in our survey agreed that a stablecoin backed by the IDR would be useful, and listed the following as use cases for it:

Trading and payments/remittances stand out as the best use cases for a IDR-backed stablecoin

When used in the context of trading, stablecoins provide a currency to retreat to when markets become volatile or bearish. As payments or as a remittance, stablecoins can replicate the action of sending fiat money across borders without the same fees.

As Lael Brainard, a member of the U.S. Federal Reserve’s Board of Governors stated:

“Stablecoins aspire to achieve the functions of traditional money without relying on confidence in an issuer — such as a central bank — to stand behind the money.”

The emergence of stablecoins is crucial to the widespread adoption of cryptocurrencies. Tokenomy has partnered with a nonprofit, the IDK foundation, to support the growth of a stablecoin pegged to the value of the Indonesian Rupiah, IDK. It can be traded on Indodax or Tokenomy.

Further development in this area would receive a warm welcome from those already in the crypto community for the added utility that stablecoins provide.

Written by Jake Tennant, Data Analyst and Writer @ Tokenomy




TOKENOMY is a digital asset marketplace where users can discover the possibilities and access the applications of cryptocurrencies and blockchain tokens.