The head of Bank Indonesia, Indonesia’s central bank, has threatened action against bitcoin adopters if the cryptocurrency is used as a method of payment.
First reported by CCN.com in early 2014, the country’s central bank issued a public notice warning citizens to be careful of adopting virtual currencies. “Bank Indonesia states that Bitcoin and other virtual currency are not valid currency or payment instruments in Indonesia,” read an excerpt of BI’s statement at the time.
Bank Indonesia (BI) governor Agus Martowardojo has reaffirmed the monetary authority’s stance that bitcoin is not a legal method of payment in the country.
Speaking in Indonesia’s capital of Jakarta last week, the central bank governor reportedly said: “I must emphasize that BI does not see bitcoin as an official payment tool in Indonesia so all people should know not to use Bitcoin as a means of payment. There is a risk.”
The central banker stressed that any new financial innovation must get Bank Indonesia’s approval – dependent on a number of requirements – before it is used or adopted as a payment method in the country. Further, the official doubled down with a threat to those defy the central bank’s order.
When the BI has asserted Bitcoin is not a valid payment instrument, those who use it will be dealt with. I do not want any violations in Indonesia.
Missing the Cue
The Indonesian monetary authority’s hardline stance against bitcoin comes despite the regulatory acceptance of bitcoin among its regional neighbors. Earlier this year, the Philippines’ central bank issued regulations for bitcoin exchanges in a legislative move that has effectively acknowledged and legalized bitcoin in the country. Just this month, the deputy director of the Philippines’ central bank heralded the move as a “pioneering regulation’.
In his embracive approach to bitcoin, Bangko Sentral ng Pilipinas (BSP) deputy director Melchor Plabasan :
It’s like any other monetary instrument [and even] an investment instrument. There are risks but essentially, it can be managed. If you want something that is fast, near real-time and convenient then there’s the benefit of using virtual currencies like bitcoin.
In August, the Australian government regulated the bitcoin industry for the first time. This week, new draft laws that offer an easier path for FinTech startups and initial coin offerings (ICOs) into the market have been proclaimed as a “game-changer” by Australian Treasurer Scott Morrison.
Disclaimer: Some statements have been unofficially translated from Indonesian.
Bank Indonesia image from Shutterstock.