Indonesia is seemingly ready to expand its stance against bitcoin into a full-blown crackdown, as according to Reuters, authorities are currently investigating the use of bitcoin in the holiday island of Bali.
As covered by Core Media, Indonesia’s central bank, Bank Indonesia (BI) has in the past shut down bitcoin processors. Last week, it issued a warning stating bitcoin and other cryptocurrencies are a risky investment. The announcement noted bitcoin isn’t a legal medium of exchange.
According to the Jakarta Post, the financial institution has now teamed up with the country’s national police. Their goal is to prevent cryptocurrency transactions in Bali, a popular tourist destination. Given its popularity, it has reportedly been considered an “alluring place to carry out illegal transactions.
Causa Iman Karana, head of Bank Indonesia’s representative office, stated:
“We are looking out for bitcoin transactions in Bali, particularly in tourist spots. We will take measures against non-rupiah transactions. (…) We warned people not to carry out transactions with virtual money because there is no authority that regulates the transactions”
Per Karana, the island is being investigated because of social media posts that appear to show Bali is becoming a “haven for bitcoin transactions.” Working undercover late last year, BI and the national police found two cafes processing bitcoin transactions on the island. They also found 44 other businesses that previously accepted the cryptocurrency, but now no longer do.
Bitcoin users at risk in Bali
While the official didn’t name the businesses accepting the cryptocurrency, he detailed how it worked at one of the cafes. The cafe only processed transactions of over 243,000 rupiahs ($18.2) in BTC. Transactions took an hour and a half to confirm and incurred a 123,000 rupiah ($9.8) fee. This reportedly discouraged the cryptocurrency’s use in the island, Karana added.
Nevertheless, the crackdown against bitcoin users is to be enforced. The official stated:
“The next step is we will ban them as mandated by the law. We ask them not to use it anymore. Along with the Directorate of Special Crime Investigation unit, we will enforce the rule that all transactions in Indonesia must use rupiah.”
While trading cryptocurrencies is yet to be banned in Indonesia, the central bank has already stated it’s looking into the issue. Per the financial institution, cryptocurrencies can be used to launder money, finance terrorism, and may have an impact on the country’s economy. All of this could be harmful to society.
According to Indonesian exchange Bitcoin.co.id, one bitcoin is currently trading for 161,000,000 rupiah ($12,075) in Indonesia. At press time, one bitcoin is trading at an average of $11,527, according to Cryptocompare. This makes it clear Bank Indonesia’s moves created a premium for bitcoin users in the country.