Bank Indonesia has banned financial institutions transactions with cryptocurrencies

The Central Bank of Indonesia has released one of the most radical among similar statements, indicating their strong stance on cryptocurrency. Official message issued by the Bank, was released under the name «Bank Indonesia warns market participants that they should not sell, buy or trade virtual currency.»

The Bank is not the first time evinces distrust of cryptocurrencies. Last year, the head of the Central Bank said that the planned ban to conduct transactions with digital currency payment operators, which has forced retail owners of cryptocurrency in a hurry to sell their savings. This occurred shortly after the authorities refused to recognize bitcoin as a means of payment, which led to problems
in the work of cryptocurrency exchanges.

It is reported that Bank Indonesia wants «all monetary obligations or other transactions in the country repaid or performed only by means of rupees». The resolution of this kind, apparently, will force the Indonesians to leave cryptocurrency exchanges and go to P2P platforms such as Localbitcoins.

«Ownership of virtual currency is very risky and full of speculation because there is no responsible body, controlling her appeal,» reads the statement of the Central Bank. «There is no official administrator, no underlying asset underlying prices of the virtual currency and its value is very changeable, it is used as a method of money laundering and the financing of terrorism. It can affect the stability of the financial system and harm the public. Therefore, Bank Indonesia warns market participants that they did not sell, not buy and not sell virtual currency.»

The statement also said:

«Bank Indonesia prohibits all providers of payment systems and the providers of financial technology in Indonesia to process payment transactions with the virtual currency.»

In fact, it is a prohibition analogous to the people’s Bank of China at the end of 2013. After the publication of the ban the rate of bitcoin has fallen and the work of the cryptocurrency exchanges for some time was interrupted, however, after some time they again started up and worked without interacting with banks until September 2017, when the regulator introduced a complete ban on the trading in cryptocurrencies in China.

At the time of publication of this article the most popular exchange in the country PT Bit Coin Indonesia, the number of users which is approaching one million, continues to work.

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