Bank Indonesia Bans Bitcoin and Other Cryptocurrencies
According to BI, virtual currencies are 'highly risky'.
Indonesia has joined the list of countries looking for ways to eliminate the use of cryptocurrencies for its residents. In a press release published on Bank Indonesia’s (BI) website, users have been advised to avoid trading virtual currencies.
Executive director Agusman wrote, “Bank 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.”
He further added that owning Bitcoins or any other virtual currency is ‘highly risky’ because, “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.”
According to the statement, these currencies allow people to engage in wrongful acts such as money laundering and funding terrorism. BI claimed that cryptocurrencies are a bubble which will damage financial stability, and will ultimately hurl the society into an economic disaster. Starting today, the central bank will not process any transactions made in Bitcoin or other cryptocurrencies.
In a telephone call with CNBC, Agusman said, “(Cryptocurrency) is not a legal medium of exchange. We remind (people of) its risks. When the risks occur, the losses will be borne by the public. We are obliged to protect consumers and protect them from a bubble.”
This news may not surprise crypto-users, as BI had stated last year that it would ban Bitcoin in 2018. Governor Agus Martowardojo explained, “We are also preventing the potential for arbitration, unhealthy business practices, and the control of businesses by parties untouchable by laws in Indonesia, who could damage the structure of industries here.”
Indonesia, the fourth most-populated country in the world, have previously only released one press release on the subject of cryptocurrency in 2014. It stated that virtual currencies were neither ‘legal currencies’ nor a legal payment method. However, it wasn’t until September of last year when Indonesia started opposing cryptocurrencies heavily. BI went on record to say that using virtual currencies was illegal, which is why Bitcoin payment platforms in Indonesia were shut down.