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Bank of Indonesia cracks down on Bali bitcoin business

Bank of Indonesia cracks down on Bali bitcoin business

JAKARTA:  Indonesian central bank is working in tandem with the special crimes unit of the national police forces to combat the reported surge in bitcoin payments.

Since that time the Indonesian central bank, known as Bank Indonesia, has clarified its position stating outright that the ban on cryptocurrencies will be enforced. This comes as the Balinese representative of Bank Indonesia (BI) has weighed in on recent reports of a surge in business transactions on the Island of Bali. Bali, a popular tourist destination for holiday-goers worldwide, attracts many tech-savvy expats to travel hot-spotssuch as Kuta, Seminyak and Ubud. These three locations have been noted by the Indonesian authorities as havens for bitcoin transactions.  It is unclear whether this fee was a transaction cost associated with bitcoin, or whether this is a usual cost built into Indonesian trade. There is a generally added government tax and service fee of a similar amount. It is unknown if the authorities were in a position to reveal more information about transactions than this. However, it is widely believed that at this stage, Indonesian authorities are emphasising that the use of bitcoin is illegal and consequences may follow. Regardless, it is not yet clear whether BI intends to prosecute those businesses already identified. It may be that the authorities are sending a message to traders considering the use of bitcoin within Bali and Indonesia in general. With an estimated population of 261 million people, Indonesia has the largest economy in Southeast Asia. Despite this large population there are only around 15 million tax registered entities within the archipelago. The Indonesian government could consider the use of bitcoin as a threat to its revenue stream because bitcoin can enable tax evasion. It is no surprise then that Indonesia has completely outlawed virtual currencies such as bitcoin. In doing so, Karana has used strong language to warn traders that “nothing other than Rupiah can be used in transaction within Indonesia”