Indonesia bans the usage of cryptocurrencies as a cost instrument

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The Governor of the Central Bank of Indonesia (BI), Perry Warjiyo, said that the agency has officially banned financial institutions in the country from using cryptocurrencies as a payment instrument or a financial service instrument.

Speaking at a webinar organized by the State Audit Committee (BPK) on June 15, Governor Warjiyo emphasized: “We ban all financial institutions, especially our partners. BI, does not facilitate or use cryptocurrency as a payment instrument or service.”

Governor Warjiyo affirmed that cryptocurrencies are not a legal payment instrument in Indonesia according to the provisions of the law, namely the Constitution, Law on BI and Law on Currency. He said BI will deploy supervisors to ensure that financial institutions comply with the law.

Indonesia bans the use of cryptocurrencies in payments, although it allows trading them as a commodity. This instrument is considered to have no fundamental basis, clear regulations and is prone to speculation. However, BI is currently planning to launch a digital rupiah and is evaluating the platform using this currency.

In May, a spokesman for the General Department of Taxation under the Ministry of Finance, Mr. Neilmaldrin Noor, said that the country is considering a plan to tax cryptocurrency transactions after the interest of domestic investors in These assets have skyrocketed.

According to Neilmaldrin Noor, this effort is promoted as Indonesia is looking to increase state budget revenue during the COVID-19 pandemic and the plan to tax cryptocurrency transactions is still in the discussion stage.

Indodax — the supposedly largest cryptocurrency exchange in Indonesia — said that the number of active members on the platform increased from 2.3 million at the start of the year to 3 million in April, in Bitcoin and other cryptocurrencies hit record highs.