Bitcoin being closely scrutinized on the Indonesian Island of Bali
Jan 20, 2018 Posted / 1427 Views
According to the report by Reuters, the officials in Indonesia are scrutinizing the use of bitcoin as the central bank has issued warnings against the vulnerabilities caused by the virtual currencies. The Indonesian authorities have started a probe on the potential sectors where cryptocurrencies can be utilized in the island of Bali, which is regarded as the holiday island of the country.
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On Dec.7, 2017 the central bank of Southeast Asia’s largest economy issued a regulation banning the use of cryptocurrencies in payment systems. Causa Iman Karana, head of Bank Indonesia’s representative office in Bali commented
“We found out from some postings on social media that Bali appeared to have become a haven for bitcoin transactions.”
Karana told the media that central bank officials and police started an undercover operation in the end of 2017 to scrutinize the online businesses, which were offering bitcoin payment services in the country. He further told the media that at present only two cafes were found in Bali that were using bitcoins, while 44 which they have investigated so far like car rentals, hotels, travel companies, jewellery stores have stopped offering such services after the ban.
Moreover, Karana told the media that one of the cafés, which the team investigated, was using bitcoin only for transactions of more than 243,000 rupiahs (about 0.001 bitcoin). The use was discouraged on its own as a single transaction took about 1 1/2 hours to be processed and included a fee of 123,000 rupiahs. The official, however, refused to name the cafe as Karana was still waiting for additional directions from Bank Indonesia in Jakarta.
“The next step is we will ban them as mandated by the law. We ask them not to use it anymore. Along with the Directorate of Special Crime Investigation unit, we will enforce the rule that all transactions in Indonesia must use rupiah.”
According to the locals in Bali said bitcoin was majorly being used by tourists on the island. Bank Indonesia had lately termed the ownership of virtual currencies as high risk and prone to speculation, as there is a regulatory authority which takes its responsibility or administers it because there is no underpinning asset in reality to be the basis for the price.
Moreover, the bank was worried that virtual currencies could also be employed in anti-national activities such as money laundering and terrorism funding and thereafter could destabilize the financial system and causes loss to the society. However, the trading of the currency has not been regulated by far and the central bank has solitarily issued statement that it was looking into the issue.
Regulators and Legislators around the world have been seized with the thoughts of how to address potential risks posed by cryptocurrencies, as bitcoin, the world’s most popular virtual currency, surged more than 1,700 percent in 2017. Prices have plunged since South Korea said last week it might ban its cryptocurrency exchanges. Nonetheless, Bitcoin.co.id, an Indonesian online cryptocurrency exchange, displayed on its website that bitcoin was trading at 162.70 million rupiahs ($12,247) per unit after losing around a quarter of its value this week.
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