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Hate it or love it, digital currencies are here to stay
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Bitcoin, a cryptocurrency that uses cryptography to make transactions anonymous, have penetrated deeper into the Indonesian market even though there has been no legal umbrella for transactions using it in the country. (kontan.com/Carolus Agus Waluyo)
F
inancial institutions in Indonesia should brace themselves as cryptocurrency is gaining popularity in the largest economy in Southeast Asia with no intention of slowing down.
Online gamer Tirta Prawisuda, 23, has been making extra cash since 2013 by selling online game items through his own store dubbed Tirta Game Shop.
At first, Tangerang-based Tirta found it hard to make his business work as global online payment service providers, like PayPal, refused to process the transactions of digital items to his clients from around the world.
“Then, Bitcoin became a hit, and I started learning how to use it for my business. The rest is history as I’ve been making a fortune out of it ever since,” said Tirta, who graduated from Multimedia Nusantara University with a major in information technology (IT) in June last year.
Tirta is not the only one riding high on the prominence of Bitcoin as a digital currency system in Indonesia.
Bitcoin Indonesia currently has 250,000 members, up from 80,000 at the end of 2015, with a daily transaction value of Rp 20 billion (US$1.48 million). Such a figure is relatively small compared to the value of about Rp 4 trillion per day in China.
Bitcoin Indonesia business development manager Suasti Atmastuti Astaman said that Bitcoin had successfully gained global trust, especially following positive sentiments triggered by the legitimacy of its use on Windows Store — an application store owned by the US tech giant Microsoft — in December 2014 and on the United Statesbased commercial space flight venture Virgin Galactic in November 2013.
Moreover, the Russian government legitimized Bitcoin as official currency at the end of November 2016. “More and more people are putting their trust in Bitcoin, hence its soaring price,” Suasti said.
As of Monday, Bitcoin is topping the list with a price of $1,018 and a market capitalization worth $16.36 billion, seeing a 151.7 percent increase annually.
According to cryptocurrency tracker CoinMarketCap, there are 700 types of cryptocurrencies circulating cyberspace at the moment.
One of them is brand-new cryptocurrency E-Dinar Coin, which has a market capitalization worth $11.57 million, that has also penetrated the Indonesian market, marked by the establishment of PT E-dinarcoin Indonesia in October last year.
At present, the company already has around 40,000 Indonesian members, seeing a rapid increase from 11,000 members in November, with a daily transaction value of about Rp 50 billion.
“We are currently working on teaming up with [payment technology companies] Visa and MasterCard so that E-Dinar Coin can be used for global online transactions,” PT E-dinarcoin Indonesia director Nanda Rizal said.
Indonesian Information and Communication Technology (ICT) Institute founder and IT expert Heru Sutadi said the presence of cryptocurrencies, like Bitcoin or EDinar Coin, could help support the Indonesian government’s plan to create a cashless society.
However, Bank Indonesia (BI) as the payment system authority has yet to approve such currencies as official mediums of exchange. There has been no legal umbrella for them in the country and consumers are forced to bear the risks by themselves.
In a 2014 press statement, BI said Bitcoin and other virtual currencies are not legal currencies and payment tools in Indonesia, as stipulated by Law No. 7/2011 on currency.
