Several governments and banks around the world are not too keen on Bitcoin and digital currency. Most of that stance can be attributed to a lack of understanding of how this new technology works, but that won’t prevent these instances from making decisions that will affect entire Bitcoin communities.
Also read: Bitcoin is “Banned” in Several Countries
Bank Indonesia: Bitcoin Is Not a Currency
As much as digital currency enthusiasts would like to see things differently, Bitcoin is not an actual currency, but rather a payment method. Bitcoin will never be an actual currency either because it lacks fungibility inherent to currencies as we know them. That being said, we might see Bitcoin evolve into an actual currency in the future.
Bank Indonesia only confirmed that status by stating that “Bitcoin is not a currency nor a legal payment tool in this country.” While it is not the first time a major bank tries to instill fear in unsuspecting citizens, they are not condemning Bitcoin either. As we have seen in the past, a general “warning about Bitcoin and virtual currencies” has been issued, pointing out the possible dangers.
In January of last year, Indonesia’s central bank’s deputy governor pointed out that using Bitcoin is in stark contrast with some of the country’s laws. As a result of that status, Indonesians were urged to tread carefully as far as Bitcoin and digital currency were concerned.
“In view of the Act No.7 Year 2012 concerning Currency and Act No.23 Year 1999 which has been amended several times, the latest with Act No.6 Year 2009, Bank Indonesia states that Bitcoin and other virtual currency are not currency or a legal payment instrument in Indonesia. The society is encouraged to be careful toward Bitcoin and other virtual currency. All risks related to the ownership/use of Bitcoin should be borne by the owner/user of the Bitcoin and other virtual currency.”
It is important to note that, while Bank Indonesia warns people about Bitcoin once again, there is still no official ban on using Bitcoin in the country itself. However, any risks associated with digital currency transactions are borne by the consumers themselves, as neither the government nor the central bank will help you if something goes awry.
Statement to Backfire on Other Common Currencies Assets?
The Bank Indonesia statement itself is pretty clear on Bitcoin and digital currency, but it also indicates that any currency other than Rupiah is not a legal medium of payment either. Other fairly common methods of payment such as the US Dollar, or even gold, are deemed as “illegal methods of payment” according to the statement.
And that is not all, as following this train of thought also means that Bitcoin is a [digital ] commodity in the same way as is gold. If that is the case, there is no reason why Bitcoin should not be considered legal in Indonesia, which gives the consumer the right to buy, sell and trade digital currency as long as it is not used as a payment method.
Even though Bitcoin is not deemed illegal in Indonesia, it is rather restricted by the government and central bank. That being said, Indonesia remains an interesting country to keep an eye on in terms of the digital currency revolution.
Source: Bank Indonesia
Images courtesy of Bank Indonesia Shutterstock