Indonesia’s central Bank has cautioned its nationals to abstain from utilizing and trading in digital currencies like bitcoin because of high danger of losses and a potential threat to the financial system.
A couple of months back, Bank Indonesia (BI) has said that the digital currencies couldn’t be perceived as a legitimate medium of exchange. Thus, they can’t be utilized as a method of payment in Indonesia.
Presently, Bank Indonesia is taking a firm position and cautioning against digital currencies. They are essentially encouraging every one of the parties to abstain from owning and trading tokens.
On Friday, the representative of Bank Indonesia, Agusman said in an announcement that:
“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”.
He additionally said that digital currencies can likewise be utilized as a part of terrorism funding and money laundering. These elements can affect the steadiness of the financial system and further cause enormous losses to the society.
He additionally elucidated:
“(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,”
The central bank additionally underlined that owning digital currencies isn’t just risky yet intrinsically theoretical. This sort of a move puts light on the challenge looked by the regulators to deal with the potential risks of digital currency while without the authority to disallow its utilization.
On asked, if such statements made by authorities can stir panic among the community that has just put resources into digital currencies.
The representative stated:
“They didn’t consult with us when buying….please help us make the people understand.”
Indonesian authorities have been vocal and genuine about their cautions. As a step forward, a month ago, Bank Indonesia issued the regulation in which, the utilization of digital currencies by the financial technology companies which are engaged with payment systems are prohibited. The authorities likewise explained that they are inspecting if there is a need to regulate the trading on cryptocurrencies.
South Korea authorities said regulators were getting ready to prohibit digital currency trading, the bitcoin costs slammed incidentally. While China has just drafted recommendations to discourage bitcoin mining. In spite of the fact that Bank Indonesia is following the restriction on particular companies utilizing cryptocurrency, they don’t preclude the exchanging of digital tokens. In addition, PT Bitcoin Indonesia, which is a virtual currency exchange with an amazing 940,000 members, doesn’t fall under the supervision of this prohibition.