Indonesia’s Regulator Issues Warning Over Crypto Sales in Institutions!

Indonesia Bans Financial Institution to Engage in Crypto Dealings
  • The Nahdlatul Ulama, declared cryptocurrency haram in October 2021.
  • Indonesia has developed into one of Asia’s significant crypto-economies.

An official warning from Indonesia’s Financial Services Authority (OJK) comes after Islamic non-government offices in the nation have called for a crypto ban. According to OJK, the Indonesian financial watchdog, financial institutions have been cautioned against providing or assisting the sale of crypto assets.

After seeing an increase in cryptocurrency Ponzi schemes, the official Instagram account for OJK warned about the dangers of investing in cryptocurrency. The head of the board, Wimboh Santoso, reported in the official article that financial institutions are barred from selling any crypto sale services. 

Here’s what the official post read:

“OJK has strictly prohibited financial service institutions from using, marketing, and/or facilitating crypto asset trading.”

Fatwa Issued by Three Islamic Groups

According to sources, a total of three Islamic groups have issued a fatwa banning the usage of cryptocurrency by Muslims, declaring it haram. Because of its purported speculative character, Islam’s major religious authority in Indonesia, the Nahdlatul Ulama, declared cryptocurrency haram in October 2021. Approximately one month after that, the Indonesian Ulema Council ruled that cryptocurrency was prohibited for use as a medium of exchange.

However, it did point out that if they adhere to Sharia principles, crypto assets may be employed as an investment instrument. There have already been three fatwas issued by Indonesian Islamic organizations prohibiting crypto usage for payment and investing purposes, Muhammadiyah being the latest.

Over the years, Indonesia has developed into one of Asia’s significant crypto-economies. More than eight times as much money was exchanged in the cryptocurrency market in 2021 as in 2020. Similar to traded commodities, cryptocurrencies are controlled by Indonesia’s trade ministry and the country’s Commodity Futures Trading Regulatory Agency. Cryptocurrency, on the other hand, is prohibited in the nation as a means of payment.

A devoted content writer having 3 years of crypto trading experience. Loves cooking and swimming. Stays up to date with the latest developments on blockchain technology.