The Ban on Cryptocurrencies Continues – Indonesia Joins Ranks with Morocco, Ecuador, and Others

The ban on cryptocurrencies is moving across borders. This time, it is Indonesia, the Southeast Asian giant, that has decided to prohibit all cryptocurrency-related transactions.


According to a local report by Pikiran Rakyat, Indonesia’s regulation will prevent payment providers from cooperating or meeting with bitcoin investors, miners, or traders. This announcement was made by the Indonesia’s Central Bank Governor, Agus Martowardojo. According to Agus, the purpose of the ban is to make sure that the country’s fiat currency – the rupiah – is kept safe.

Speaking about the ban at last week’s annual meeting, Agus said:

We are also preventing the potential for arbitration, unhealthy business practices, and the control of businesses by parties untouchable by laws in Indonesia that could who could damage the structure of industries here.

The new legislation is also designed to help provide a level playing field for Indonesia’s financial system, requiring “all financial technology activists who move in the payment system to register with Bank Indonesia, report on activities, and conduct trials in the regulatory sandbox.” This means that for any financial system to operate in Indonesia, they should be prepared to register their stake with the central bank and be regulated just like any other financial institution.

Martowardojo also made it clear in his report that technological innovations, especially those in the financial sector are moving at a faster pace. This does not only change the entire system, but brings concerns to the entire economic models of future economies. This means that policymakers are needed to ensure that the impact of these technologies is researched and monitored.  This will see all cryptocurrency-related transactions to be openly touted as illegal be it an individual or an institution.

The  decision has caused  an uproar in the cryptocurrency market, with Bitcoin Indonesia CEO Oscar Dermawan criticizing the move, adding that Bitcoin is a “remarkable technological achievement.”

In a country with a population of over 260 million, of which only 23% have bank accounts, Bitcoin has proven to be proven to be extremely popular among Indonesians. In fact, the most recent stats on Bitcoin Indonesia, the country’s largest exchange, show the volume of daily transactions at just under $8 million USD. Now that the ban on cryptocurrencies is a fait accompli, one wonders what impact this will have on the price of Bitcoin – especially in the Asian market.

How do you think Indonesians will react? Will they move elsewhere to operate as in China or they will remain in their own country and see their digital coins crumble? Let’s know in the comments below.


Images courtesy of AdobeStock, Wikimedia Commons

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