Bank Indonesia (BI), the central bank in the country, issued a press release that warns its citizens against the use of selling, buying or trading cryptocurrencies.
It affirms that virtual currencies are not recognized as a valid payment instrument, so they are prohibited to be used as means of payment in the country.
This statement comes after the September reassertion that Bank Indonesia will not accept Bitcoin (BTC) as payment, leading to the voluntary closure of two Indonesian-based crypto exchanges, BitBayar and TokoBitcoin. Bank Indonesia expressed its concerns over potential use of digital currencies in money laundering and funding terrorism as reasons behind their anti-cryptocurrency campaign.
It also fears that a bubble could destabilize the country's financial sector.
Bank Indonesia spokesman Agusman said in a statement:
Previously, Bank Indonesia Governor Agus Martowardojo said that transactions in virtual currencies present "arbitrage opportunities, unhealthy business practices and business control by parties outside the legal reach of Indonesia that could damage our industry structures."
Indonesian authorities have been increasing their warnings and regulation on banning the use of cryptocurrencies by financial technology companies involved in payment systems, and said it is examining whether there's a need to regulate trading on virtual currency exchanges.
BI’s pronouncements have routinely contrasted with what its citizens have in mind. And this statement shows that BI dislikes Indonesians to have the appetite for the decentralized currency.
When asked whether such statements from authorities could create panic among those who had already invested in cryptocurrencies, Agusman said: "They didn’t consult with us when buying....please help us make the people understand."
At the time of the statement, Bitcoin.co.id, an Indonesian online cryptocurrency exchange, said on its website that bitcoin was trading at 217.44 million rupiah ($16,288) per unit.
With the issued statement, Indonesia joins other countries that have already banned cryptocurrency usage. They include: Bangladesh, Bolivia, China, Ecuador, Iceland, India, Russia, Sweden, Thailand, Vietnam, South Korea and Argentina.