Bank Indonesia Governor Perry Warjiyo announced in a virtual seminar that the central bank has banned Indonesian financial institutions from accommodating cryptocurrency as a means of payment or other financial services tools.
The ban, according to Perry, is based on existing laws “[Cryptocurrency] is not legitimate payment instruments under the Constitution, Bank Indonesia Law, and Currency Law,” Perry said in the virtual seminar on Tuesday, June 15, 2021.
He also explained that to ensure financial institutions conform to this policy, the central bank will mobilize field supervisors.
The use of cryptocurrency has become popular lately following the dynamic value this currency holds compared to investment products that have existed before despite its lack of consumers’ protection. Bank Indonesia is also known to counter the use of cryptocurrency due to its speculative nature.
There are also reports suggesting that the central bank plans to issue its own digital rupiah that is currently being formulated as the Central Bank Digital Currency (CBDC). “This will observe the economic condition and digitization context that is pushed by Bank Indonesia,” the central bank’s official Instagram account posted on May 30, 2021.
The main driver behind the issuance of the CBDC is that the digital rupiah will be issued and controlled by a sovereign state. The safety aspect of this digital currency central bank is also being prepared which will ensure the safety of its system and its consumers.