Bali's government has initiated a stringent enforcement campaign against tourists who employ cryptocurrency for transactions, emphasizing the exclusive acceptance of Indonesia's official currency. Governor Wayan Koster held a press conference on May 28, cautioning visitors that severe consequences await those who opt for cryptocurrency as a payment method. The measures include potential deportation, administrative penalties, criminal charges, business closures, and other stringent sanctions. The crackdown aims to deter cryptocurrency usage among tourists and maintain the dominance of the Indonesian fiat currency within the region. Compliance with the government's regulations regarding payment methods is advised to avoid legal ramifications. This development aligns with the ongoing global discourse on how to legally and regulatively incorporate digital currencies into traditional financial systems.
During the meeting, key attendees included Bali's chief police inspector and Trisno Nugroho, the head of the Bali Representative Office for Bank Indonesia, the country's central bank. Nugroho reiterated that cryptocurrency trading is permissible; however, the use of cryptocurrency for payments is prohibited.
Governor Koster emphasized that the only legally recognized currency for transactions within Indonesia is the rupiah. Violating this regulation could lead to a maximum penalty of one year of imprisonment and a fine of 200 million rupiah ($13,000).
Despite the strict stance taken by Bali's governor and the Indonesian authorities, the country is making progress towards launching a national cryptocurrency exchange, expected to be operational by the coming month. It has been reported that the Ministry of Trade will serve as a custodian and clearing house for the local cryptocurrency markets. Although the platform experienced delays after its initial target of being operational by the end of 2022, preparations are now underway for its introduction.
According to Coinmap, Bali has 36 businesses accepting cryptocurrency, mostly in Ubud. Kompas found meditation retreats, motorbike rentals, and a crypto-themed cafe among the establishments embracing digital currency.
Cryptocurrency payments crackdown in Bali reflects a broader trend in Southeast Asia, as governments in the region tighten regulations. Malaysia now requires cryptocurrency exchanges to register with the Securities Commission, while Thailand implements a licensing regime for crypto-related businesses. The Philippines has issued permits to several cryptocurrency exchanges.
The motivation behind increased regulation stems from concerns over money laundering and terrorist financing, as cryptocurrencies' anonymity and lack of transparency make them susceptible to illicit activities. Additionally, governments aim to safeguard national currencies and maintain control over their monetary systems.
Cryptocurrency adoption surges in Southeast Asia despite regulations, with Indonesia ranking second globally, following Nigeria. The report by Luno highlights the region's significant increase in cryptocurrency users, including high levels of usage in the Philippines and Thailand.