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We prohibit use and processing of digital currencies: Bank Indonesia Governor

Bank Indonesia has recently clarified that it prohibits the use of digital currency such as bitcoin in the country.

Addressing the Bank Indonesia’s Annual meeting 2017, Governor Agus D.W. Martowardojo said:

“We prohibit the use and processing of virtual currencies in order to prevent money laundering as well as financing of terrorism and to preserve the rupiah’s status as legal tender in the territory of the Republic of Indonesia.”

Earlier in 2014, the BI had clarified that bitcoin and other digital currencies are “not currency or legal payment instrument in Indonesia” and cautioned users saying that all related risks should be borne by the owner/user of the digital currency.

According to local media source Pikiran Rakyat, the central bank is going to enact a regulation that will completely ban digital currencies in the country.

“We are also actively seeking to prevent arbitrage opportunities, unfair business practices and the control of businesses by parties operating beyond the legal reach of the Republic of Indonesia that could be detrimental to industry structure,” Martowardojo added.

The governor also revealed that the BI plans to fine-tune the regulation for fintech players, who will be required to register with the central bank. He said:

“We shall hone the regulation for Fintech players, including e-commerce, to maintain business competition, risk mitigation and consumer protection. A level playing field with formal financial institutions must be maintained. We require all Fintech players to register with Bank Indonesia, report their activities and complete Regulatory Sandbox trials.”

“We have set forth the rules of the game in Fintech regulations, while also refining the electronic money and Anti-Money Laundering and Terrorism Funding Prevention (APU-PPT) regulations."

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