In Indonesia, the use of cryptocurrencies is legal when it comes to trading and related operations. But it is illegal for exchanges and payments.

Last Sunday, the governor of Bali, Indonesia, Wayan Koster, threatened tourists visiting the island with serious penalties. In a press conference, the regional president recalled that the use of cryptocurrencies to make payments and purchases is firmly prohibited in the country. He said that he will act with strong punitive measures.

Based on such announcement, any tourist who is caught paying for a service with digital currencies could be immediately deported. Another punishment for offenders would be detention by the authorities. The ruler’s threat immediately generated concern among tourists and supporters of the crypto sector. The island generally receives visits from enthusiasts of these assets.

Using Cryptocurrencies for Payments is a Crime in Indonesia

Koster’s threats are not new, considering that the national authorities themselves are hostile to crypto assets. Consequently, Indonesia’s central bank strictly prohibited the use of digital currencies as a means of payment.

Nevertheless, the governor’s warning goes beyond the rules applied by the authorities against locals. In fact, the president even warns citizens of other countries that they could be taken to jail for violating that provision.

“The use of cryptocurrencies as a means of payment will be dealt with firmly,” said the provincial president. Next, he confirmed that “strict actions range from deportation, administrative sanctions, criminal sanctions, closure of business premises and other harsh sanctions.”

In the statement to the media, the governor was accompanied by the police chief of the province and a representative of the central bank. This last official, Trisno Nugroho, stressed that cryptocurrency trading is legal, but not its use as a means of payment.

Fines for payments with digital currencies can reach 2 million Indonesian rupiahs, which is equivalent to about $13,000 US dollars.

Impact of These Policies on Tourism

The authorities’ tough policy against cryptocurrencies could become a serious threat to Bali’s economy. Much of it is sustained on the basis of tourism. In this way, an intransigent repression against these assets can scare away tourists with very negative results for the province.

In other words, if tourists feel threatened with fines and persecution, they will simply decide not to travel to Bali. There are many places in the Asia-Pacific region that would be willing to welcome such travelers and allow them to trade virtual currencies.

According to local media, in Bali there are numerous sites that accept tokens as a form of payment. These include meditation retreats, motorcycle rental businesses, and a cafe for virtual currency enthusiasts.

It is not the first time that the governor of Bali has earned the contempt of tourists. In December last year, the Indonesian Criminal Code was approved, according to which sexual relations between persons not united by marriage were prohibited. Rumor immediately spread that the law would also apply to tourists. However, Koster himself later denied that rumor.

In any case, what is strictly prohibited is the use of cryptocurrencies to pay for goods or services. Some critics, quoted in CoinTelegraph, criticized the move, saying it was a way for the governor to do damage as he is just months away from the end of his term.

By Audy Castaneda


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