Bank Indonesia Declared Crypto Payments 'Not Legitimate'

January 15, 2018

Bank Indonesia Declared Crypto Payments 'Not Legitimate'

Central bank of Indonesia has forbidden cryptocurrency payments in the country, announcing the decision in a press-release issued on Saturday. 

According to the press-release, cryptocurrencies "are not recognized as legitimate instrument of payment" since they are not issued in Indonesia. 

Bank Indonesia states:

"<...> Financial transactions conducted within the territory of the Republic of Indonesia, has to be fulfilled with Rupiah."

This is why the central bank has decided to make it clear that the country's payment operators are prohibited processing transactions in virtual currencies.

The central bank states:

"Bank Indonesia affirms that it forbids all payment system operator <...> and financial technology operators in Indonesia, both bank and nonbank institution, to process transactions using virtual currency."

However, crypto exchanges were not mentioned in the text of the press-release, although another Asian country, South Korea, is reportedly planning to ban these exchanges. 

Information about a possible ban of cryptocurrency payments in Indonesia first came out in December 2017. Bank Indonesia expressed their concerns about high volatility of cryptocurrencies, lack of backing from authorities as well as lack of underlying assets to support its values.

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