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Indonesia bans Cryptocurrency payments

Bank of Indonesia banned the use of cryptocurrency payments in the country.

Bank of Indonesia affirms that virtual currencies, including bitcoin, are not recognized as legitimate instrument of payment, therefore not allowed to be used for payment in Indonesia. This is in line with Act No.7/2011 on The Currency, which states that currency shall be money of which issued by the Republic of Indonesia and every transaction that has the purpose of payment, or other obligations which need to be fulfilled with money, or other financial transactions conducted within the territory of the Republic of Indonesia, has to be fulfilled with Rupiah.

Ownership of virtual currency is highly risky and loaded with speculations, considering there is no authority responsible, no official administrator, no underlying assets to base the virtual currency price, and that the trade value is highly volatile. This means that virtual currencies are vulnerable to bubble risks, and susceptible to be used for money laundering and terrorism financing, therefore can potentially impact financial system stability and cause financial harm to society. All things considered, Bank Indonesia warns all parties not to sell, buy, or trade virtual currency.

Source: Bank Indonesia

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