Indonesia Central Bank Issues Cryptocurrency Warning, Again



Bank Indonesia Cryptocurrency Warning

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Indonesia’s central bank has issued a new statement warning its citizens and ‘all parties’ in the country against selling, buying or trading cryptocurrencies like bitcoin in the country.

In a public release over the weekend, Bank Indonesia (BI) reaffirmed its longstanding stance of refusing to recognize ‘virtual currency including bitcoin’ as a valid payment instrument in the country. More pointedly, the authority warned all parties ‘not to sell, buy or trade’ cryptocurrencies after underlining them as a threat to ‘the stability of the financial system.’

A translated excerpt from the public statement reads:

“Ownership of virtual currency is very risky and full of speculation because there is no authority responsible, there is no official administrator, there is no underlying asset underlying virtual currency price and trading value is very volatile so vulnerable to the risk bubble (bubble) and prone to be used as a means of washing money and financing of terrorism, so that it can affect the stability of the financial system and harm the public. Therefore, Bank Indonesia warns all parties not to sell, buy or trade virtual currency.”

The central bank’s first public warning on bitcoin came as early as February 2014. At the time, the central bank urged adopters to be careful of ‘bitcoin and other virtual currency’ while insisting they will shoulder any risks associated with the ownership/usage of bitcoin. In October 2017, the central bank’s chief threatened action against bitcoin adopters after outlawing cryptocurrencies’ usage in payment altogether.

“When the BI has asserted Bitcoin is not a valid payment instrument, those who use it will be dealt with. I do not want any violations in Indonesia,” said BI governor Agus Martowardojn last year.

With its most recent statement, the central bank has continued to step up its warnings against the usage of cryptocurrencies by prohibiting ‘all payment system service providers’ including banks, payment gateways and fund transfer providers from processing cryptocurrency-related transactions.

Asked if the spate of statements could cause panic among Indonesian citizens already invested in cryptocurrencies, BI spokesman Agusman told Reuters: “They didn’t consult with us when buying….please help us make the people understand.”

The increased scrutiny comes amid reports of the central bank preparing regulation that will enforce a blanket ban on all cryptocurrencies in the country sometime this year.

Featured image from Shutterstock.

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