Indonesia’s central bank has indicated that it’s considering introducing new regulations that would prohibit the use of cryptocurrencies such as bitcoin in the country, bringing the law into effect next year.
Onny Widjanarko, Bank Indonesia’s head of transformation, said that the use of the digital currency could be used for money laundering, terrorism, drug trafficking, and prostitution.
At present, the central bank is conducting a review to determine whether Bank Indonesia would include a ruling on bitcoin in its existing e-money regulation, or in a separate one on digital currency.
Widjanarko stated in The Jakarta Post that:
Currently, there is no single regulation for those who carry out transactions using bitcoin.
The head of transformation issued an appeal on merchants not to use the cryptocurrency as a legal form of payment, stating that the bank would not be held responsible for any losses incurred as a result.
If Indonesia’s central bank does follow through with its plans it would follow in the footsteps of China who has outlawed the use of bitcoin as a form of payment.
Interestingly, even if the central bank did ban the use of bitcoin in the country, would it necessarily mean that people stop trading in it?
Take China, for instance. Even though the People’s Bank of China (PBoC) it banned the digital currency in September, trading hasn’t stopping in country, it has simply shifted its focus to that of the Hong Kong bitcoin market. The same could be said of Indonesian traders, who may simply turn their attention to other countries in order to trade in the crypto market.
This announcement from Bank Indonesia comes at a time when the digital currency is experiencing a surge in value. Today, it was reported that bitcoin has scaled the $13,000 milestone for the first time, pushing its market cap to an impressive $218 billion. As a result, it has helped to boost the combined cryptocurrency market to an impressive $376 billion, catapulting it ahead of JPMorgan Chase’s $363 billion value.
Yet, despite this meteoric rise plenty of naysayers remain. Stephen Roach, a Yale University senior fellow and the former Asia chairman and chief economist at Morgan Stanley, recently argued that bitcoin was a ‘dangerous speculative bubble‘ and that ‘like all bubbles, they burst.’
That, however, doesn’t appear to be happening at the moment, given positive market events that are due to take place later this month. That, however, isn’t stopping people from speculating as to when the ‘bubble’ will burst.