Bank Indonesia launches investigation against Bitcoin use in Bali, cautions against the cryptocurrency

Bank Indonesia (BI), the country’s central bank, has lowered a special police team to investigate the use of the crytpocurrency Bitcoin across several points in Bali.

“We are conducting data collection in Bali, especially in tourist areas, coordinating with police. Transactions in other than Rupiah will be dealt with,” head representative of BI Bali Province, Causa Iman Karana, said on Saturday, as quoted by Antara.

Tourism hubs such as Bali are likely to attract the attention of “irresponsible” people to conduct virtual currency transactions, according to Karana, who says he’s reminding people in Bali not to use any cryptocurrencies because they are not under regulation and have been declared as an illegal payment method in Indonesia.

“We remind the public to be careful with transactions using Bitcoin, because such currencies are not regulated by law,” he said.

Executive director of the BI communications department, Agusman, previously said in a written statement that the central bank forbids Bitcoin because it is not recognized as a legitimate payment instrument and therefore is prohibited to be used as a means of payment in Indonesia. This is in accordance with Law no. 7/2011, concerning currency, says Agusman.

In that law, currency is money issued by the Republic of Indonesia and any transactions in the country must be paid with Indonesian Rupiah.

BI also issued BI Regulation No. PBI: 19/12/PBI/2017 on the implementation of financial technology to clarify the ban.

BI prohibits service providers, fintech, e-commerce, and electronic payment gateways from accepting Bitcoin.

The possession of the cryptocurrency, says Agusman, is very risky and its value is very volatile.

As a result, Bitcoin is vulnerable to the risk of inflation and is also prone to money laundering and financing terrorism, so it could very much affect the stability of the financial system and do harm to the public, according to Agusman.

“Therefore, Bank Indonesia warns all parties not to sell, buy or trade cryptocurrency,” he said.