Indonesian Central Bank Latest To Consider Bitcoin Position

Recent months have seen increasing action from regulators worldwide, in response to rapidly rising bitcoin and cryptocurrency markets.

With the exchange of cryptocurrencies an often wholly unregulated industry, those tasked with responsibility for financial markets have been forced to respond, with central banks and regulators across the globe revealing their specific approach to bitcoin regulation.

The Indonesian Central Bank has today become the latest to join those considering and implementing new regulations. According to reports in local press, the bank is considering a series of new regulations that would combine to effectively outlaw bitcoin in Indonesia altogether.

Onny Widjanarko, head of transformation at the bank, said that the bank had concerns over bitcoin’s use in money laundering, terrorism and other criminal enterprises, which was cited as one of the main reasons for pursuing a ban.

The bank is now commissioning a review process to examine whether bitcoin can be subject to existing rules for regulating e-money, or whether entirely new provisions would be required to produce the desired legal effect.

“Currently, there is no single regulation for those who carry out transactions using bitcoin,” he said in the Jakarta Post.

The comments went further in urging merchants to refuse dealings in bitcoin, and to remind transacting parties that the central bank could not be responsible for any losses arising from dealings in cryptocurrencies.

Assuming the measures are ultimately brought into law, Indonesia would be aligning with a similar approach to that of China, which has already outlawed cryptocurrency exchanges and ICOs, and to a lesser extent Russia, where new laws to ban cryptocurrency payments are set to be introduced in the new year.

This is in stark contrast to the position elsewhere. For example, in the U.S., the Securities and Exchange Commission has said that some ICOs may require the regulator’s approval under existing securities laws, but has otherwise taken no steps toward a blanket ban.

This more liberal approach has also been favored across much of Europe and in some parts of Asia, although it remains to be seen whether any other jurisdictions choose the more restrictive approach as more countries declare their hands.