The Central Bank Governor, Perry Warjiyo, said that neither the constitution nor central bank laws recognize the eligibility of cryptocurrencies as a means of payment.
The Indonesian government has expressed its strong refusal for the fast-rising digital currencies, saying these would open doors for illegal platforms and activities.
The authorities have recently stopped the operations of 26 investment business/peer-to-peer platforms, including three crypto firms, claiming they were all unlicensed.
Authorities have also made it clear that Binance is illegal in Indonesia because the platform does not have a license to operate in the country.
The crypto industry in Indonesia expects that stricter measures will be implemented in the coming weeks.
There are lots of reasons why governments around the world, like Indonesia, are repelling the fast dominance of cryptocurrency.
One of the major reasons is they are a highly volatile asset class and has little backing behind them, which provides little protection for investors.
That is why governments who are reluctant of cryptos are starting to develop Central Bank Digital Currencies (CBDC) which are seen as an alternative for cryptocurrencies.
CBDC is a digital token representation of a country’s currency, but unlike cryptocurrencies, it is centralized and regulated by a country’s monetary authority.
Even the financial body giant Bank for International Settlements (BIS) is advocating the implementation of CBDCs instead of the now highly popular cryptos.
China, Japan, Canada, France including Indonesia are now fast-tracking the development and roll-out of CBDCs to improve their financial systems.
Image courtesy of Cointelegraph News/YouTube
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