Reports indicate that Indonesian bitcoin payment platforms Toko Bitcoin and Bitbayer have ceased operations in response to recent announcements that the Bank of Indonesia will not recognize bitcoin as a means of payment. Although the position of Indonesia’s central bank renders the business model of cryptocurrency payment processors unviable, Indonesian bitcoin exchanges are continuing to operate freely.
Recent Statements Made by Bank of Indonesia Have Prompted Some Indonesian Business to Restructure Their Operations
Announcements that Indonesia’s central bank will not recognize bitcoin as a legitimate means of payment have resulted in the closure of bitcoin payment platforms operating in Indonesia. Since the announcements, Bitbayer, an Indonesian alternative to Bitpay, has announced that it will terminate its services on November 1st and encourages its customers to withdraw their funds before the end of the month. Toko Bitcoin, a company that once allowed its customers to purchase prepaid phone and electricity vouchers using bitcoin, has ceased accepting bitcoin as a means of payment.
Oscar Darmawan, CEO of bitcoin exchange PT Bitcoin Indonesia, has told media that the closures were not the result of direct intervention on the part of Indonesia’s central bank. Darmawan stated that “there have not been any direct requests from the Bank of Indonesia to Bitcoin Indonesia to close down these two websites.”
PT Bitcoin Indonesia Had Previously Partnered With Kinnerjapay Corp to Accept Bitcoin for Transactions Executed Through Its Platform
Darmawan also discussed PT Bitcoin Indonesia’s decision to cease providing payment services and continue operating its exchange platform. Darmawan addressed the “grey area that the [central bank’s]statement has created,” stating that [PT Bitcoin Indonesia] ha[s]decided to comply with the Indonesian regulator because our exchange… is our main concern.” Darmawan also stated that he regularly meetings with Indonesia’s Financial Services Authority in order to ensure regulatory compliance.
Last month, Bank of Indonesia’s Director of Payment System Policy Department, Eny V Panggabean, reaffirmed that the central bank will not recognize bitcoin as a currency. Speaking at a banking seminar, Paggabean stated that the use of bitcoin as a currency is forbidden by the nation’s Service Provider of Payment legislation. The central bank’s recent comments reiterate the position statement published by the Bank of Indonesia in February 2014, which states that “bitcoin and other virtual currency are not valid currency or payment instruments in Indonesia.”
According to Cryptocompare, bitcoin to Indonesian Rupiah trading comprises the tenth largest national bitcoin market according to 24-hour volume. Currently, Indonesian volume accounts for 0.18% of total trading volume.
Do you think that the position of Indonesia’s central bank will affect the growth of Indonesian bitcoin long term? Share your thoughts in the comments section below!
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Author: Samuel Haig