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Indonesia’s central bank to enforce crypto payments ban

  • Jun 23, 2021

Indonesia’s central bank is sending supervisors out to ensure local financial institutions aren’t defying the nationwide ban of crypto payments.

During a virtual seminar, the bank’s governor reiterated that local financial firms and payment provided are prohibited from facilitating the use of cryptocurrency to settle payments or as an instrument used in other financial services.

The central bank governor emphasized that crypto assets are ‘not legitimate payment instruments under the constitution, Bank Indonesia Law, and Currency Law,’ noting that field supervisors will be sent out to ensure that local financial institutions adhere to the policy.

Bank Indonesia prohibited financial institutions from using crypto for payments in late 2017, with the central bank halting payment processors from using cryptocurrency to settle transactions the previous year.

Despite the central bank’s prohibition of crypto for payments and its early 2018 warnings against virtual currency, Indonesia’s Commodity Futures Trading Regulatory Agency issued regulations in February 2019 that legitimised cryptocurrencies as speculative commodities and paved the way for cryptocurrency derivatives to be traded on local stock exchanges.

On 30 May 2021, the central bank provided more details on the CBDC via Instagram, stating that a state-backed digital currency aligns with its policy of digitisation initiative and advances its overall monetary objectives.
According to the Bank for International Settlements, central banks representing 20% of the globe’s population are expected to launch CBDCs within the next three years.
Source: https://cointelegraph.com/news/indonesia-s-central-bank-marshals-staff-to-enforce-crypto-payments-ban