Indonesia’s central bank, the Bank Indonesia, will prohibit the use of cryptocurrencies as a payment tool, according to Governor Perry Warjiyo. The governor made the announcement during a virtual seminar on June 15. He also said that crypto would not be allowed for “other financial services tools,” though it was not explicitly stated what these tools were. Regulators across countries are actively working to regulate cryptocurrencies.
Indonesia is currently working on a broad cryptocurrency framework.
Central bank’s governor Warjiyo said that cryptocurrencies were not recognized as a means of payment by the constitution or by central bank laws and expected financial institutions to follow this policy accordingly. The central bank will also mobilize teams to ensure that institutions comply with the crypto payment ban. Indonesia is currently working on a broad cryptocurrency framework, having said that the crypto market breeds the development of illegal platforms. Recently, the central bank stopped 26 investment businesses/peer-to-peer lending platforms because they were unlicensed. This included three cryptocurrency platforms.
Governments continue to regulate cryptocurrencies.
The head of the task force behind the crackdown on cryptocurrencies, Tongam Lumban Tobing, also said that Binance was illegal in the country because it did not have a license. This does not bode well for the crypto market in Indonesia, which is likely to experience even more stringent actions from regulators. Governments across countries are now banning cryptocurrencies from being used as means of payment, though they are not outlawing the holding of the assets. This comes at a time when central bank digital currencies (CBDC) are becoming the main focus of governments and central banks worldwide, who wish to maintain sovereignty on legal tender.