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The Bitcoin bubble is close to bursting in Indonesia as the country’s central bank is set to issue a regulation to ban all forms of cryptocurrencies.
The Bitcoin soared to popularity in Indonesia in 2014, where many of its transactions were recorded online. Since then, its value has risen nearly 2,000 percent, making it an attractive form of investment for many Indonesians.
But Bank Indonesia is already preparing to ban Bitcoin transactions, stating that any form of e-money is unacceptable in the country.
The Bitcoin as a virtual currency is very volatile… making it a dangerous place to put money in, said Eni Panggabean, Executive Director of the Payment System Department of Bank Indonesia.
“Investors should realize if the value of Bitcoin can go up drastically, means it can also come down drastically,” she said.
But that is not the only concern of the central bank, which aims to protect and strengthen the main currency, the Rupiah, as the country’s legal tender.
“Using Bitcoin as a currency opposes the country’s laws and goes against the central bank’s regulation on the process of payment transactions that we set in 2016. The law says that all parties are prohibited from using virtual currencies during payment,” said Panggabean.
However, more and more Indonesians are getting lured into investing in the virtual currencies. The Bitcoin is now valued at nearly 17,000 US dollars, from just around 1,000 US dollars at the beginning of this year. The sudden increase in value makes it ideal for many who are looking for short-term investment.
“If bitcoin is a matter of investment or commodity, so it’s not the responsibility of Bank Indonesia. Bank Indonesia needs to have coordination with the financial service board and with the ministry of communication to ban this kind of investment. So I think it is still a long way to go for Indonesia to ban bitcoin,” said Bhima Yudhistira, an economist.
Yudhistira expressed a belief that there are certain advantages and disadvantages of Bitcoin.
The advantages usually benefit companies that engage in international transactions, he said adding that in recent years, the Indonesian government has reported that virtual currencies like Bitcoin supports terror financing, drug trafficking, and money laundering because most of the transactions can be made anonymously.
The Indonesian government is now hoping to push investors to put their money in the country’s legal assets, investing in infrastructure and other industries that can help to improve and strengthen the country's economy.
Despite uncertain future in Indonesia, the Bitcoin remains popular, with nearly 700,000 people engaging in approximately 50,000 US dollars daily Bitcoin transactions.
(CGTN)
