Bank Indonesia published a press release on Saturday where it affirms that virtual currencies, including bitcoin, are not recognized as legitimate instrument of payment, therefore not allowed to be used for payment in Indonesia.
The central bank of the Republic of Indonesia added that 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.
Cryptocurrencies 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.
Bank Indonesia statement
The news comes as Bank Indonesia announced on January 15 that it has teamed up with the National Police to prevent transactions using cryptocurrency in Bali.
We are looking out for bitcoin transactions in Bali, particularly in tourist spots. We will take measures against non-rupiah transactions.
Causa Iman Karana
The head of Bank Indonesia Bali office
Recently, we have reported that cryptocurrency investors in South Korea will be fined for refusing to convert their virtual accounts into real-name ones.