Bank Indonesia bans fintech firms from using cryptocurrencies in payments

Photo: Bank Indonesia website

Indonesia’s central bank has issued a regulation banning use of cryptocurrencies by financial technology companies involved in payment systems, and said it is examining whether there’s a need to regulate trading on virtual currency exchanges.

“Financial technology operators are banned from using virtual currency in payment system activities,” said Sugeng, a deputy governor at Bank Indonesia (BI).

The regulation, signed in November but made public on Thursday, requires financial technology companies involved in processing payments, such as e-wallets, to register at BI to ensure virtual currencies are not used in payments.

Bank Indonesia (BI) first advised against using virtual currencies in 2014 and two years later banned payment system service providers from processing transactions using virtual currencies.

The central bank said on Thursday it had issued the new regulation to enhance governance over virtual currencies that could pose a big risk for the economy.

BI Governor Agus Martowardojo has previously said Bitcoin is not recognised as legal tender in Indonesia and warned that virtual currencies could be used in money laundering and terrorist financing.

So far, trading of virtual currencies has not been regulated in Indonesia, said Rosalia Suci, head of BI’s legal department, but possible regulation of exchanges for them was something that the central bank “continues to look into”.

Bitcoin.co.id, a local online cryptocurrency exchange, on its website said that at 0740 GMT Bitcoin was trading at 233.4 million rupiah ($17,225) per unit.

The virtual currency on Thursday briefly soared to a record high of $14,100 at the Luxembourg-based Bitstamp exchange, after jumping more than 35 percent this month

Some Indonesian merchants, including an online grocery store in Bali and online t-shirt stores in Jakarta, say on their websites that they accept payment in Bitcoin.

Reuters

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

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Following vacancies can be applied for (only in Singapore).   

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  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.