Bali Cracks Down on Crypto

Bali authorities will be taking strict measures against tourists paying for goods and services with cryptocurrency

Bali Cracks Down on Crypto

On May 28, Bali’s local government-owned news agency Antara reported that the governor Wayan Koster said tourists who use crypto as a means of payment will face strict legal actions, reminding that Indonesia’s fiat currency is the only legal tender in the country.

The situation with crypto laws in Indonesia is controversial. On one hand, the country aims to roll out a national crypto exchange by next month, after a delay linked to regulatory concerns. On the other hand, crypto is not a legal tender there.

Although local laws do recognize crypto as a trading asset, they do not allow using it as a payment means. Therefore, those violating the regulations can witness legal punishments that range from deportation to administrative sanctions, criminal penalties, closure of business premises and other tough sanctions.

According to local financial regulation rules, the Indonesian rupiah is the only currency that can be legally used for payments in the country. The use of other currencies can potentially be punished with a maximum potential sentence of one year in prison and an over $13,000 (200 million rupiah) fine.

At the same time, many Bali-based businesses have reportedly long accepted cryptocurrency payments. Some examples revealed by the country’s newspaper Kompas include a meditation retreat, a motorbike rental business and a crypto-themed cafe. Most of the crypto-friendly businesses are located in Ubud — a tourist attraction magnet. That’s why, concerns arise that such strict measures may scare the tourists away.

However, the government is reportedly working with financial regulators and other stakeholders to develop a comprehensive framework for the regulation of cryptocurrencies in Indonesia. The country seeks to balance the potential benefits of cryptocurrencies with the need to protect consumers and ensure financial stability.

Nina Bobro

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Nina is passionate about financial technologies and environmental issues, reporting on the industry news and the most exciting projects that build their offerings around the intersection of fintech and sustainability.