Indonesia’s central bank issues fresh warning over cryptocurrencies

FILE PHOTO: A copy of bitcoin standing on PC motherboard is seen in this illustration picture, October 26, 2017. REUTERS/Dado Ruvic/File Photo

Indonesia’s central bank has issued a fresh warning about trading in cryptocurrencies like bitcoin because of the risk of losses to the public and even a potential threat to the stability of the financial system.

Bank Indonesia (BI) has previously said that cryptocurrencies were not recognized as a legal medium of exchange, so that they could not be used as a means of payment in Indonesia.

“The ownership of virtual currencies is high risk and prone to speculation because there is no authority who takes responsibility, there is no official administrator and there is no underlying asset to be the basis for the price,” BI spokesman Agusman said in a statement issued late on Friday.

He said that virtual currencies could also be used in money laundering and terrorism funding, and due to all these factors could have an impact on the stability of the financial system and causes losses for society.

“(Cryptocurrency) is not a legal medium of exchange. We remind (people of) its risks. When the risks occur, the losses will be borne by the public. We are obliged to protect consumers and protect them from a bubble,” Agusman said by telephone on Saturday.

Asked whether such statements from authorities could stir panic among those who had already invested in cryptocurrencies, he said: “They didn’t consult with us when buying….please help us make the people understand.”

Indonesian authorities have been stepping up their warnings and last month BI 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.

South Korean authorities this week sent global bitcoin prices temporarily plummeting and virtual coin markets into turmoil when the justice minister, Park Sang-ki, said regulators were preparing legislation to halt cryptocurrency trading.

Prices later rebounded on the Luxembourg-based Bitstamp, bitcoin to stand at $14,116 in latest trading after touching $12,800 this week.

Bitcoin.co.id, an Indonesian online cryptocurrency exchange, said on its website that bitcoin was trading at 217.44 million rupiah ($16,288) per unit.

Some Indonesian merchants, including an online babyware supplier, indicate on their websites that they accept payment in Bitcoin.

Also Read:

Bank Indonesia bans fintech firms from using cryptocurrencies in payments

Reuters

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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.