By: Savannah Smith | 12-06-2017 | News
Photo credit: Colicaranacia |

Bank of Indonesia to Ban Bitcoin Transactions

Despite the impressive, even astonishing, record-breaking numbers Bitcoin posted the past week surpassing the $10,000 mark, the Bank of Indonesia remains skeptical. In fact, the bank plans to issue a regulation that would effectively block transactions using Bitcoin.

A bank official said that the regulation concerning the leading digital currency would take effect next year. Bitcoin was created in 2009 by an unknown person or group under the alias Satoshi Nakamoto.

Bank of Indonesia head of transformation Onny Widjanarko confirmed that the regulation on the said digital currency would be issued soon. He said in Jakarta on Tuesday: “Currently, there is no single regulation for those who carry out transactions using Bitcoin.”

The country’s central bank is conducting an in-depth study to establish whether the central bank would include a ruling on Bitcoin under the prevailing e-money regulation or in a separate regulation on cryptocurrency.

For now, the Bank of Indonesia is urging merchants not to accept Bitcoin as an official payment instrument in replacement of cash or credit card. The bank stressed that it would not be responsible for any losses that would be incurred for any Bitcoin transaction.

The bank also issued concerns that the Bitcoin could also be potentially used to violate existing regulations on such big crimes as terrorism, money laundering, prostitution and drug trafficking.

Countries have the varying reception to Bitcoin so far with Japan being open to it, accepting it as a payment instrument. Russia and China are rejecting Bitcoin on the other hand.

Bitcoin transactions do not also follow many of the safety measures of mainstream banks and currencies. Bitcoin transactions are made without middlemen or banks. They also charge no fees and transactions can be made anonymously.

So huge has bitcoin become that it is now touted to be even bigger than Buffett, Boeing, and New Zealand economy.

While a debate over the threat of bitcoin suffering from a bubble still raging, the flagship cryptocurrency climbed this year to more than 1,000 percent. Market tracker now puts the total value of all bitcoins in circulation at US$190 billion, a far cry indeed from what it stood only in August when one coin could buy one a hefty supply of avocados.


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