Indonesia: BI Prohibits Bitcoin Transactions

• Nov 10, 2017

TEMPO.CO, Jakarta – Bank Indonesia (BI) has banned the use of Bitcoins in financial transactions. The central bank said that transactions using the virtual currency are against the law because the only valid instrument for payment in Indonesia is the rupiah.

BI executive director of payment system policy and supervision Eny V. Panggabean said Eny said the ban was issued to protect the people. The use of bitcoin is considered risky because it does not have a liable institution.

BI also said that Bitcoins have the potential to be used for criminal activities such as drug dealings or credit card purchases using other people’s cards.

Despite the ban, Eny is aware that many Indonesians use bitcoins as a means of payment. The central bank, she said cannot be held responsible for any risk of the transaction, “as it is not regulated.”

Bitcoin Indonesia CEO Oscar Darmawan said that number of Bitcoin Indonesia members is about 500 people. However, Oscar said, the members do not use bitcoin as a means of payment.

“In Indonesia, it is used for investments and price speculating for the bitcoin currency itself,” he said.

Bitcoin, he said, is not used for payment in Indonesia because it has not been regulated by BI, unlike in other countries that have legalized payment transactions using bitcoin, such as Japan, America, and some countries in Europe.

Oscar added that bitcoin is a safe a means of payment as transactions are performed using algorithms and a peer-to-peer scheme.

Despite banning bitcoin, BI said they support the digital currency’s database, the blockchain. Eny said, the central bank sees the technology as a positive thing.

Source: https://en.tempo.co/read/news/2017/11/10/056913116/BI-Prohibits-Bitcoin-Transactions