Bank of Indonesia unveiled its plans to release new regulations that would ban transactions of the cryptocurrency Bitcoin, a digital currency made in 2009 by an unknown entity dubbed as Satoshi Nakamoto.
The new regulation would take effect in 2018, an official said. The regulation on e-money would be handed out in the near future, said Onny Widjanarko, Bank Indonesia head of transformation.
Indonesia’s central bank is mulling the ban because of the worries that Bitcoin can be used in terrorism financing, money laundering, prostitution and drug trafficking, Onny said.
Bank Indonesia, which has the power to make policy on monetary affairs, is currently carrying out an in-depth review to determine whether Bitcoin as an official payment instrument would be regulated under the prevailing e-money rules or in a separate regulation addressing cryptocurrencies.
“Currently, there is no single regulation for those who carry out transactions using Bitcoin,” Onny said in Jakarta.
Bank Indonesia further appealed to merchants not to accept Bitcoin as an official payment instrument, Onny said, adding that the bank is not accountable for any losses incurred via transactions.
If Indonesia pursues the plan, it would join the queue of countries like China and Russia in cracking down on cryptocurrencies while Japan accepts it as a payment instrument.
In early September, regulators prohibited ICOs and forced exchanges to close. However, transactions in Bitcoin have not been banned.
Deputy finance minister of Russia also revealed in September that he expects pending legislation on cryptocurrencies to issue a ban on payments.
Bitcoin transactions are neither executed with neither middlemen nor banks. There are no transaction fees imposed and transactions can be done anonymously.
Jakarta Implements Cashless Payments
Meanwhile, the country’s capital Jakarta has revealed its plans to fully implement cashless payments in the city.
Jakarta is setting an example in cashless technology, said Doni P. Joewono, head of Bank Indonesia’s Jakarta branch.
“The Jakarta administration has fully implemented the non-cash technology. Furthermore, the Home Affairs Ministry will enforce the use of cashless technology in all provincial administrations across Indonesia starting on January 1st, 2018,” Doni said at the Bank Indonesia Annual Gathering.
Jakarta already uses cashless technology in the social assistance programme and public transport system. It is aimed that 40-50 percent of transactions in the city will be cashless by the end of 2018.
The goal of cashless capital is to develop economic efficiency and transparency and to boost the city’s domestic revenue.
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