The Crypto Brothers Descend On ‘Silicon Bali’

With its ocean views and resorts, Bali has long attracted surfers and vacationers. Today, it is also a top destination for crypto enthusiasts around the world.

Among the recent arrivals is Ilia Maksimenka, a 33-year-old Russian blockchain entrepreneur, who came to the Indonesian island in 2020, shortly after the outbreak of Covid-19.

“It’s very easy to meet the right people,” he says. “As far as South East Asia is concerned, Bali is like the [international] crypto hub now.

While the pandemic has dampened international tourism, the rise of working from home has also prompted many to rethink their comforts of living in cities that have historically been business hubs. For Maksimenka, who comes from Moscow, Bali was an exotic alternative.

“If you come to Bali, you may have 10 times cheaper living than in California. But you have the same comfort and much higher quality of food. People prefer to come here to experience tropical life,” he says.

In Bali’s expat community, which likes to describe itself as “digital nomads”, crypto is a common interest. On social media, many are bragging about the fortune they’ve made trading cryptocurrency in sunny villas, while friends at home rummage through the cramped apartments.

Tokocrypto office in Jakarta, Indonesia © Dimas Ardian/Bloomberg

†[We’re] Work in [these] hippie places. And you start to see Lamborghinis,” says Emilio Canessa, an Italian who works in marketing for the internet computer, a project of blockchain company Dfinity. “The caliber of the people here. † † It’s crazy.”

“They started calling this place Silicon Bali,” he added.

Tokocrypto, an Indonesian crypto exchange, says it now has 37,660 registered users in Bali, up from just 808 at the start of 2021. Members of the Bali crypto community the Financial Times spoke to had various interests, including trading cryptocurrency, non-fungible tokens, metaverse and decentralized finance. But the most recent arrivals fit a certain mold.

“It is very hard for the men. White men, people in their early twenties,” said Antria Dwi Lestari, who does community work for Tokocrypto in Bali.

With more of these young men from all over the world flocking to Bali in search of the crypto dream, companies have seen an opportunity. This year Tokocrypto launched T-Hub, a “crypto clubhouse” in Bali with a co-working space and a swimming pool. Indodax, another Indonesian crypto exchange, has its second office on the island. Canessa suggested that his company establish a “community-oriented cultural presence.”

At the same time, other companies in Bali are struggling. Up to 80% of the island’s economy relies on tourism, a source of income that has been nearly cut off during the pandemic.

The influx of crypto migrants is not compensating for this loss of income. Last year, only 51 tourists visited the island, compared to more than 6 million a year before the pandemic, according to the Bali Bureau of Statistics. Parts of the island have practically been depleted.

Members of the crypto community are not blind to the local businesses struggling around them. Last year, an anonymous group launched Bali Token, a crypto token. According to its website, it can be used as a “discount voucher” at “any tourist spot in Bali”, offering “millions of[s] from Balinese. † † stay strong during Covid-19”. The token’s value has fallen nearly 100% since its peak in January, according to data provider CoinMarketCap.

Up to 80% of Bali’s economy depends on tourism © Sonny Tumberlaka/AFP/Getty Images

Separately, an online petition called on the Indonesian government to create a “remote worker visa” to boost the “digital and creative economy” as Bali fights tourism drought. It has been signed by 3,416 people since its launch two years ago.

According to the petition, telecommuters in places like Bali without specialized permits often have an unclear legal status.

Maksimenka suggested that many social media posts about Bali should be treated with skepticism.

“Most of those golden kids trying to show off their wealth [on social media], they are mostly scammers,” he said. Only about 10% of Bali’s crypto community is “serious about technology,” he added, with the rest “just jumping on the hype” and trying to make money.

Mega Septiandara, an Indonesian who works remotely for a Balinese investment company, also suggested that not every expat is on the island for a long time.

“I have a job and that’s how I stay alive. Crypto is cool. I get a good side income from it,” she said.

But others are “trying to make a fortune,” she added. “Some are having a bit of a hard time and have decided to return to their country of origin. [They] you may find it a bit boring in Bali. After a while it’s just, ‘Oh, it’s the beach.’ †

Video: Highlights from the FT Summit on Crypto and Digital Assets | FT live

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