Indonesia has vowed to ban Bitcoin and all forms of cryptocurrency, which it views as a threat to the rupiah, as the legal tender in the country.
“We are also preventing the potential for arbitration, unhealthy business practices, and the control of businesses by parties untouchable by laws in Indonesia that could damage the structure of industries here,” said Bank Indonesia governor Agus Martowardojo, as quoted by Pikiran Rakyat.
Bitcoin, which can be defined as a decentralised digital currency system that can be used for online purchases, is popular in Indonesia, where it was estimated in 2015 that there were US$30,000 to US$50,000 worth of Bitcoin transactions taking place each day.
However, the central bank feels it is important to stop the use of bitcoin and cryptocurrency in the country, not only as a measure to protect the rupiah, but also to maintain a level playing field and even prevent an undetected flow of money that lead to criminal activities, such as money laundering and terrorism.
Bank Indonesia’s policy would come as a huge blow to Bitcoin owners, who have been seeing the value of Bitcoin soar from under US$ 1,000 for one Bitcoin at the start of the year to its current value of over US$ 10,000.
This could prompt Bitcoin owners in Indonesia to quickly cash in on their digital asset before the policy takes effect, which, according to some experts, would be a shame, as they believe the value of cryptocurrency could potentially still soar higher. However, some experts believe that the current high value represents a speculative bubble that could burst at any time due to a lack of regulations.