The Central Bank of Indonesia (BI) caused a brief panic when it sent out a press release on Indonesia’s bitcoin ban earlier this month, reminding the Indonesian public to not buy and sell Bitcoin and other virtual currencies.
Many media outlets chose to present the news with headlines proclaiming that cryptocurrencies are illegal in Indonesia, even though the regulation itself only states that they can’t be used as a form of payment, just like other countries’ currencies can’t be used to buy things in Indonesia.
BI’s announcement coincided with news of raids on some coffee shops in Bali who had started accepting Bitcoin as payment method.
And around the same time, other countries also declared their intention to tighten regulations around cryptocurrencies. South Korea said it was considering a ban on the trade of cryptocurrencies, though it later revised this apply only to anonymous trading.
The avalanche of bad news led to concern in the Indonesian crypto community, who believed that crypto ownership or trading might altogether be criminalized in the country, says Danny Taniwan who runs Indonesia Blockchain Network, and online community that shares information and organises meetups.
He has a relaxed outlook. “I was there at BI’s press conference, it was much more nuanced than what the media later reported,” he says. BI expressed no intention to shut down cryptocurrency exchanges which means crypto ownership and trading are not affected.
Though the regulatory environment in Indonesia is known to be volatile, Taniwan thinks that no major changes have to be expected right now. “Regulators understand that they need this innovation. The intention of press conference was to remind the public of the risks of investing in and trading cryptocurrencies.”
Multiple government work groups are currently exploring how to work with blockchain to improve transparency processes like land rights certificates and citizen identification.