Cryptocurrency payments are now banned in Indonesia

on Jun 16, 2021
  • Indonesia has stopped the use of cryptocurrencies for making payments.
  • The government also wants to prohibit crypto assets for other financial services tools.
  • However, the country does not plan to outlaw cryptocurrencies completely.

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Indonesia’s central bank has cracked down on the use of cryptocurrencies for making payments. The announcement was made by the bank’s governor Perry Warjiyo during a virtual seminar on June 15.

Apart from the ban on payments, Warjiyo also stated that cryptocurrencies will also be prohibited from “other financial services tools.” However, it’s not clear what tools are being referred to because no additional detail was given.

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Tougher crypto regulations coming

Indonesia’s body language doesn’t show a friendly disposition to cryptocurrency trading in the country. Like some other countries in Asia, the government has stressed the negative side of crypto assets, which include their use for money laundering activities. Indonesia has also pointed out the highly risky nature of crypto investments, which has prompted the country to place serious regulations.

Presently, the country is working on a range of cryptocurrency frameworks after banning 26 peer-to-peer- lending platforms because they were not licensed. The platforms stopped include three cryptocurrency-based businesses.

Tongam Lumban Tobing, who is the head of the task force that led the crackdown, also reiterated that Binance is operating illegally because it doesn’t have a license in the country.

This is what the crypto market in Indonesia needs at the moment, and there may be tougher regulations ahead.

Outlawing cryptocurrencies may not be necessary

Although the government is tightening its hold on crypto assets, it doesn’t appear that the government is prepared to ban the assets completely in the country. People and businesses are still allowed to trade the asset class as commodities.

The government is just concerned about the risk of the assets and is doing everything to protect investors.

Several governments are now stepping up in their regulation against cryptocurrencies. But while there are frowns against such digital assets, another form of digital assets is seeing increased attention.

Several governments are planning to launch central bank digital currencies (CBDCs), the digital version of their native currencies.