Police spokesperson Sr. Komr. Stefanus Satake Bayu Setianto told a press conference on Tuesday that the 33-year-old man was arrested in Jimbaran, Bali.

"He has advertised his business on social media, and said he accepts cryptocurrency as a payment," Satake said.

From the suspect, police have also seized Rp 3.4 million (US$227) in cash, an ATM card and a mobile phone used to manage his social media and crypto asset accounts.

Satake said the suspect was charged with violating the 2011 Currency Law that bans the use of currencies other than the rupiah, which carries a maximum penalty of one year in prison or Rp 200 million in fines.

Bali Police cybercrime unit head Adj. Sr. Comr. Nanang Prihasmoko said the arrest was the result of an investigation following information about the use of crypto for payments in Bali.

Nanang said investigators disguised as would-be renters for the arrest.

According to the police, the suspect said he accepted cryptocurrency to get more customers. "He said there are some foreigners who want to use cryptocurrency payments because their bank accounts have been blocked in their country. So, they can only pay in cryptocurrency," Nanang said.

The suspect, however, claimed he had never made a deal using cryptocurrency prior to the arrest.

The Bali administration has warned foreign tourists visiting the popular resort island against making cryptocurrency payments, with Governor I Wayan Koster saying on Sunday the practice was illegal.

“Foreign tourists who behave rowdily, conduct activities that are not within the limits of their visa, use cryptocurrencies for payments or violate any laws will be sanctioned. They could be deported, receive a warning or even be charged with criminal offenses under the Criminal Code," Koster said.

Kompas.id reported last week that international tourists in Bali who faced difficulties making financial transactions due to economic sanctions imposed on their countries, such as Russia, were utilizing cryptocurrencies as a means of payment.

Koster said local businesses should not accept crypto payments from tourists. "Do not tolerate tourists who do not respect the laws of Indonesia or the local customs [in Bali]."

Bank Indonesia's (BI) Bali office head Trisno Nugroho said the rupiah should be used as the only currency for both cash and non-cash payments in Indonesia, given that the central bank has ensured access to the rupiah.  

“We have provided access to the rupiah through money changers in Bali. There are at least 138 [licensed] money changers across the province, with a total of more than 500 branches,” he emphasized.

“As an asset, cryptocurrency is allowed to be traded in Indonesia as we have Bappebti to monitor it. However, the use of cryptocurrency for payments is banned as we recognize the rupiah as the only currency for making payments,” he said also on Sunday. (dre)

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