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s if issuing regulations were not enough, Bank Indonesia (BI) now wants to show that it is serious about its warnings over payment activities using Bitcoin and other virtual currencies in Indonesia by teaming up with other state institutions.

The central bank’s regional office in Bali, for instance, has started working with the local police to curb virtual currency transactions, which are rampant in restaurants and hotels on the island.

“We will impose sanctions on anyone who facilitates payment transactions using virtual currency in Indonesia,” said BI spokesman Agusman at the bank’s headquarters on Monday.

As the country’s payment system regulator, BI can only take measures on the payment-related side, in which payment providers connect cryptocurrency users through gateways, Agusman said. Several popular gateways for virtual currencies include BitPay, Coinbase and CoinGate.

Meanwhile, other functions of virtual currencies, such as exchange, mining and wallets, are the responsibility of other authorities, he added.

Agusman said BI also prohibited banks and financial institutions from receiving virtual currency payments, so that cryptocurrency holders would not be able to liquidate their assets into rupiah and could only do so in other countries where they were allowed.

“But if they go to South Korea, virtual currencies are prohibited. [They are banned] in China too,” he added.

Various countries have different stances on Bitcoin, with China and Russia rejecting them, while Japan accepts them as payment.

Last year, BI followed China and Russia in prohibiting cryptocurrencies by issuing a regulation, PBI No. 19/12/PBI/2017 on the implementation of fintech, effective on Jan. 1.

In the new regulation, BI has declared cryptocurrencies illegal given their high price volatility that could pose huge risks to Indonesia’s economy.

The 2017 regulation was a follow-up on an earlier rule issued in 2016, PBI No. 18/40/PBI/2016 on payment transactions, which prohibits payment transaction providers from using virtual currencies. It threatens violators with various administrative punishments, ranging from warnings to license revocation.

Eni V. Panggabean, BI’s executive director of payment system policy and supervision, said the reason for prohibiting virtual currencies was because of their pseudonymous aspects, in which users could choose not to reveal their identities during transactions.

“If virtual currencies are used for criminal activities, such as money laundering and terrorism financing, it will be difficult to trace [the users] because of the pseudonymous aspects,” she said, adding that there was no single global regulation on cryptocurrencies, while their fluctuations were very high.

Bitcoin traded at Rp 209.9 million (US$16,793) per unit at 7 a.m. on Jan. 10, according to data at cryptocurrency-ranking chart app CoinGecko as cited by Eni. The price fluctuated drastically until 9 a.m. on Jan. 15, when it was recorded at Rp 193.8 million per unit.

BI data show that there are more than 1,400 virtual currencies globally with a $752.54 billion market capitalization. Bitcoin is the biggest cryptocurrency with a market capitalization of $246 billion, equal to 33 percent of the global figure.

BI might prohibit the use of virtual currencies for payment, but this has not stopped Bonar, a virtual currency investor, from investing his money in the digital asset. He said he could still reap good gains from investing in virtual currencies despite the regulator’s ban.

“As far as I know, BI only prohibits the use of virtual currencies for payment. But as to owning them, BI only warns people [of the risks],” he said, adding that the ban would not affect the investment climate in virtual currency.