Cryptocurrency Trading Faces Strict Regulations in Indonesia Despite Legal Status

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Fintoism-Indonesia-BI-fast-Money-Transfers-1024x683-1 Indonesia Cryptocurrency Exchange

As Indonesia sanctions legal cryptocurrency trading, the utilization of crypto for payments sees a strict crackdown, especially in tourist hotspots like Bali. This firm handling of crypto-based payments includes harsh penalties and possible incarceration.

The Indonesian province of Bali has imposed stringent measures to discourage tourists from employing cryptocurrencies for purchasing goods and services. Bali’s governor recently reminded everyone that Indonesia’s official currency, the Rupiah, remains the only recognized legal tender.

Implications of Crypto-based Payments in Bali

According to a recent report by Antara, the state-owned news agency, Governor Wayan Koster of Bali convened a press conference on May 28, reiterating his firm stance against tourists using cryptocurrencies as a mode of payment.

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Governor Koster highlighted that violators of this policy would face severe consequences. He stated, “These strict actions may range from deportation, administrative penalties, criminal charges, closure of businesses, and other stringent sanctions.”

Key figures present at the meeting included Bali’s chief police inspector and Trisno Nugroho, the head of the Bali Representative Office for Bank Indonesia — the country’s central bank.

Clarification on the Use of Cryptocurrency in Indonesia

In a bid to clear up any confusion, Nugroho confirmed that while cryptocurrency trading remains permissible, the use of cryptocurrency for payments is categorically prohibited.

Koster reinforced that the only lawful mode of payment in Indonesia is the country’s fiat currency — the Rupiah. The use of any other currencies, including cryptocurrencies, carries severe penalties, including a maximum potential sentence of one year in prison and a fine amounting to 200 million rupiah ($13,000).

Investigations Reveal Crypto Payment Acceptance in Bali

These admonitions from the Bali governor follow an investigative report by Kompas, a well-regarded Indonesian news outlet, published on May 26. The report allegedly exposed several businesses in Bali that accepted cryptocurrency payments. These include a meditation retreat, a motorbike rental establishment, and a crypto-themed cafe.

A community-driven project named Coinmap, dedicated to locating businesses that accept cryptocurrencies, reveals that there are currently 36 such businesses in Bali. The majority of these businesses are located in Ubud, a popular tourist destination.

Indonesia’s Journey Toward National Crypto Exchange

Notwithstanding the stringent stance taken by the Bali governor and the broader Indonesian authorities, the country is forging ahead with plans to launch a national cryptocurrency exchange in the coming month.

Indonesia’s Ministry of Trade is reported to be acting as a custodian and clearing house for the local cryptocurrency markets. The platform, initially slated for launch at the end of 2022, has been delayed.


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