Over 100,000 Indonesians have protested in recent waves, driven by economic frustrations and a deadly police incident. Clashes erupted after a motorcycle taxi driver was killed during demonstrations in Jakarta. This unrest highlights systemic issues in Southeast Asia's largest economy. Our analysis explores root causes while examining how such turmoil could boost cryptocurrency use as a financial alternative.
Economic Inequality Sparks Nationwide Protests
Parliament members receive a monthly housing allowance of 50 million rupiah, nearly 10 times Jakarta's minimum wage. This comes amid budget cuts to health and education for populist programs. Protesters demand wage hikes aligned with inflation, which has made daily life unaffordable for many.
According to the World Bank, Indonesia's economy may grow at just 4.8% annually through 2027, far below President Prabowo Subianto's 8% pledge. Rising unemployment, especially among youth, exacerbates tensions. Local taxes have surged up to 300% in some areas, fueling outrage.
- Property tax hikes in Pati Regency reached 250%, drawing massive crowds.
- Food and education costs have risen sharply, leading to mass layoffs.
- US tariffs on Indonesian exports add pressure, with a 19% rate on non-exempt goods.
This accumulation of grievances has led to calls for dissolving parliament.
Police Brutality Ignites Escalation
The death of 21-year-old Affan Kurniawan, run over by a police vehicle during protests, became a tipping point. Demonstrations spread to cities like Surabaya and Medan, with clashes involving tear gas and fires.
“It is the accumulation of public frustration with political elites whose policies do not serve the people, compounded by Affan’s death, which became the tipping point,” said Andreas Harsono, a senior Indonesia researcher at Human Rights Watch.
Protesters have targeted police stations, destroying infrastructure in response to perceived brutality. Three deaths occurred when a building was set ablaze during riots.
President Prabowo urged calm, stating, “trust the government and my leadership” in a video address. Yet, critics warn of potential chaos if unaddressed.
Government Policies and Military Influence
Under Prabowo, a former general, military roles in civilian affairs have expanded. A new law allows soldiers more civilian posts, raising fears of authoritarianism.
Protests also oppose budget slashes for free meals, which caused poisonings due to underfunding. Insensitive remarks from lawmakers, like defending allowances amid austerity, have worsened public anger.
“If Prabowo isn’t careful … protests may devolve into chaos,” noted Made Supriatma, a visiting fellow at ISEAS-Yusof Ishak Institute.
This suggests a disconnect between elites and citizens, echoing past unrest under Suharto.
Crypto's Role Amid Economic Turmoil
Indonesia ranks third globally in crypto adoption, with 14.16 million investors in Q1 2025. Transactions hit Rp 224.11 trillion by mid-year.
Amid inflation and rupiah weakness—falling 0.9% during protests—crypto offers a hedge. Officials discuss Bitcoin for national reserves to counter global shocks.
Decentralized Finance as a Safe Haven
Volatility in traditional markets, like the IDX Composite dropping 2.27%, drives interest in digital assets. Bitcoin and stablecoins provide alternatives to unstable fiat.
- Over 320 tokens trade on platforms like Pintu, supervised by OJK.
- Adoption grew 352% year-on-year, per OJK data.
This unrest parallels trends where economic instability boosts blockchain use for remittances and savings.
Original Insights on Future Trends
Synthesizing these events, the protests reveal policy missteps risking foreign investment and growth. Looking ahead, this could accelerate decentralized privacy tools' adoption, similar to GDPR's impact on data norms.
In emerging markets like Indonesia, unrest often catalyzes crypto innovation, potentially leading to higher blockchain integration in daily finance by 2026.
For more on global crypto trends, visit Chainalysis reports (external: https://www.chainalysis.com/) and Reuters Indonesia coverage (external: https://www.reuters.com/world/asia-pacific/). Explore our site for crypto hedging strategies (internal: /crypto-hedging-guide).
Economic divides, police actions, and governance failures drive Indonesia's unrest, testing Prabowo's leadership. In the crypto ecosystem, such volatility underscores digital assets' value as resilient alternatives. How will Indonesia balance reform with innovation—will crypto emerge as a key stabilizer?
