Indonesia Central Bank Takes New, More Neutral Stance on Bitcoin

Indonesia’s central bank, Bank Indonesia, has issued a new statement defining its stance on bitcoin.

The comments bear similarities to others released over the past few months, but suggest the government will now take a hands-off approach to digital currency. Today’s statement differs slightly from the reports issued last month, in which Bank Indonesia’s deputy Governor suggested digital currency might break the bank’s rules.

Since then, representatives from the local bitcoin business community have participated in informal discussions with regulators to clarify the boundaries of their operating environment. The latest statement reads (translated from Indonesian):

“Noting the Law no. 7 of 2011 on Currency and the Law no. 23 of 1999 which was amended several times, most recently by Act no. 6 In 2009, Bank Indonesia states that the virtual currency bitcoin and others do not constitute currency or legal tender in Indonesia.

People are encouraged to be careful of bitcoin and other virtual currencies. All risks related to ownership/use of bitcoin will be borne by the owner/user of the virtual currency bitcoin and others.”

Bitcoin businesses

Local bitcoin entrepreneur Oscar Darmawan was optimistic about the statement, saying bitcoin users can now move foward with plans to promote its use in the world’s fourth-largest country by population.

“We are really glad for that stance. It seems Indonesia Central Bank’s final stance will be in neutral position and will not prohibit bitcoin in Indonesia. Indonesia will regulate bitcoin as an e-commodity instead of e-currency.”

He added: “Indonesia will have bright future for bitcoin to grow as ‘media transfer’ for payments, instead of for e-currency – as it should be. The stance will also means bitcoin will be regulated in the same way as Singapore did. Really thank you to our government.”

Darmawan, who also heads Indonesia’s largest bitcoin exchange Bitcoin.co.id and was a key participant in the discussions, said he also plans to introduce the country’s first bitcoin ATM soon and hopes the government’s clarification would make bitcoin investors more comfortable about reaching out to local startups.

Despite a population of over 240 million and membership in the G20 group of world’s major economies, Indonesia’s bitcoin scene is relatively small.

A clear hands-off approach could see it grow soon, reaching out first to a young and technology-friendly public in large cities like Jakarta, and then possibly to millions of unbanked and under-banked people in regional locales.

Jakarta, Indonesia Image via Shutterstock