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Indonesia tightens grip on crypto as assets catch on
Bank Indonesia (BI) and the Indonesian Ulema Council (MUI) have cautioned against using cryptocurrencies as a form of payment, while the Trade Ministry plans to develop a local exchange for the digital assets.
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Bank Indonesia (BI) and the Indonesian Ulema Council (MUI) have cautioned against using cryptocurrencies as a form of payment, while the Trade Ministry plans to develop a local exchange for the digital assets. (Shutterstock/File)
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s cryptocurrencies become ever more popular in Indonesia, authorities have begun taking more stringent measures to control the digital assets, but experts say these moves have not dulled investors’ appetites and that crypto has a viable future in the country.
Bank Indonesia (BI) Governor Perry Warjiyo has said several times this year that regulations prohibit the use of cryptocurrencies for payment in Indonesia, as the country does not recognize virtual currencies as legal tender. The law only permits the buying and selling of cryptocurrencies as tradeable assets.
The Indonesian Ulema Council (MUI) announced a similar stance on Nov. 12 but added that it considered investing in cryptocurrency without underlying assets haram, likening the activity to gambling.
“The growing euphoria over crypto has made BI and MUI even more uneasy, as if crypto might someday beat the rupiah. This has led to a fear that it could disrupt banks, as if all funds would run to crypto,” said Ibrahim, director of futures firm Garuda Berjangka, on Monday.
BI and MUI, he suggested, hoped their positions would slow down the crypto trend as regulators had yet to embrace digital assets.
Read also: Indonesia Ulema Council forbids cryptocurrency trading
A BI financial stability study conducted in the first half of the year estimated that some 6.5 million crypto investors were operating in June 2021, exceeding stock investors, who numbered some 2.4 million.
