- Bali strictly prohibits the use of currencies other than the rupiah.
- Foreign exchange businesses operating without permission are subject to imprisonment and a penalty charge of $1.4 million.
In an effort to regulate financial transactions within its popular tourist destination, Bali, the Indonesian local government is taking strict measures against the use of cryptocurrencies by visitors. Governor Wayan Koster of Bali conveyed this message to local media on May 28.
Wayan Koster, Governor of Bali, stated:
“Foreign tourists who behave inappropriately, do activities that are not allowed in their visa permit, use crypto as a means of payment, and violate other provisions will be dealt with firmly […] Strict actions range from deportation, administrative sanctions, criminal penalties, closure of business premises, and other tough sanctions.”
The conveyed message, serving as a clear indication from an island heavily dependent on international tourism, has the potential to adversely impact the industry. Prior to the onset of the COVID-19 pandemic in 2020, Bali welcomed over 6 million foreign tourists, with a significant number utilizing cryptocurrencies for transactions at hotels, restaurants, tourist attractions, and shopping establishments.
Governor Koster outlined stringent penalties for offenders, seemingly equating the utilization of digital assets with narcotics, indicating the seriousness with which the government views this matter.
Furthermore, a warning was issued to foreign exchange businesses, stating that operating without permission from the country’s central bank could result in severe penalties, including imprisonment and a maximum fine of $1.4 million.
Indonesia has stringent regulations regarding currency usage, imposing fines and imprisonment for individuals utilizing currencies other than the national currency, the rupiah.
Governor Koster emphasized that violations would be met with administrative sanctions such as written reprimands, fines, and restrictions on payment transactions. Director Trisno Nugroho, the head of Bank Indonesia, clarified that while cryptocurrencies are permitted in the country, they are not recognized as valid payment methods.
Similarly, Thailand, another popular tourist destination in Asia, has prohibited crypto payments, although cryptocurrency trading is still permitted within the kingdom.
In 2021, Jerry Sambuaga, the deputy minister of trade in Indonesia, gave the green light for the country to initiate a dedicated crypto exchange. The platform, called Bourse, has faced repeated delays but is set for release this June 2023.
