Have you ever faced a situation where you were banned from using a certain payment method in a foreign country? If you have, you might understand what the tourists in Bali must feel. Recently on May 28, tourists were banned from using cryptocurrency, like Bitcoin, as a payment method.
The provincial government also circulated a notice that notified tourists of such drastic developments. And a certain punishment was also made in case someone got caught while doing so. Why did all this happen? What was the actual reason behind it? All these questions will be answered in detail below.
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Bali Governor Strictly Bans Crypto Payments
Before the COVID-19 pandemic in 2020, Bali welcomed over 6 million foreign tourists, with many utilising cryptocurrencies for various transactions such as hotel bookings, dining, tourist activities, and shopping. But now, Governor Wayan Koster of Bali has implemented strict measures to address the use of cryptocurrencies as a payment method.
During a press conference held in Bali on Sunday, May 28, the governor, accompanied by representatives from the police and the Indonesian central bank representatives, warned tourists about the serious consequences they would face if they engaged in cryptocurrency transactions. Tourists who disregard this ban risk facing harsh penalties.
Chief Inspector Trisno Nugroho of the Bali Police, present at the press conference, reinforced the governor’s message by stating that while cryptocurrency trading is permitted in Indonesia, its usage as a method of payment is strictly prohibited.
Press Release — Investigative Report
Just two days before the governor’s announcement, an investigative report published by Kompas, the country’s official newspaper, revealed the existence of several businesses in Bali accepting cryptocurrency payments. Among them were a meditation retreat, a motorcycle rental business, and a cafe focusing on cryptocurrencies.
However, data from Coinmap, a community project that maps businesses accepting cryptocurrencies, indicates that 36 such businesses in Bali, including restaurants, meditation studios, and motorbike rental companies, accept cryptocurrency payments.
Rupiah as the Only Currency
Governor Koster emphasised that the Indonesian rupiah is the only legally recognised currency for payments in the country, and the use of any other currencies, including cryptocurrencies, is subject to severe legal penalties. Indonesia maintains strict laws concerning currency usage, imposing fines or imprisonment for individuals transacting with anything other than the national currency, the rupiah.
Up to $13,000 Fine and 1 Year in Jail for Using Crypto in Bali
At a press conference on Bali’s tourism development, Governor Wayan Koster expressed that foreign tourists who engage in inappropriate behaviour, violate their visa permits, use cryptocurrencies for payments, or contravene other regulations would be dealt with firmly. Governor Koster added that those tourists and the businesses involved might face 1-year imprisonment and a fine of up to 200 million rupiah (~$13,000).
Mixed Reactions by Community on Social Media
The recent ban on cryptocurrency payments in Bali has sparked a flurry of reactions within the crypto community, leading to a lively discussion on platforms like Reddit. While opinions vary, it’s clear that the decision has not gone unnoticed.
One Reddit user took to the platform to express their belief that the choice of payment method should ultimately be left to the discretion of businesses and customers. They argue that as long as both parties know the potential risks associated with cryptocurrency transactions, they should proceed as they wish.
On the other hand, another Redditor voiced their support for the ban, stating that it is a reasonable measure for Indonesia. This individual argues that the country relies on tourism income to stabilise its currency and economy. While understanding the rationale behind the ban, they disagreed with the decision.
The Reddit thread showcases the diverse opinions within the crypto community regarding the Bali cryptocurrency payments ban. It highlights the ongoing debate surrounding the role of cryptocurrencies in the traditional financial system and the extent to which they should be regulated.
Indonesian National Crypto Exchange in Process
In an intriguing twist amidst Bali’s governor’s strict ban on cryptocurrency payments, Indonesia’s crypto landscape is poised for an intriguing development. Under Zulkifli Hasan’s leadership, the Indonesian Ministry of Commerce has set its sights on an ambitious project — the establishment of a National Exchange for cryptocurrencies.
Originally slated for launch at the end of the previous year, the platform encountered a few hurdles along the way. However, recent updates suggest that it is finally on track to become operational in the coming month. This milestone holds significant implications for Indonesia’s crypto ecosystem.
The Ministry of Commerce will assume a crucial role as the custodian and clearinghouse for local crypto markets. This proactive step demonstrates that Indonesia recognises the escalating importance of cryptocurrencies and seeks to integrate them seamlessly into its financial system.
The Economic Impact of Tourism for Indonesia
Bali’s economy relies heavily on tourism, contributing to almost 28% of its revenue. This thriving industry brings opportunities and creates jobs for the local population. Consequently, a decline in tourist arrivals could have far-reaching consequences, leading to a reduction in income and impacting the overall economy of Bali.
Given the significance of tourism as a vital source of income for Bali, the potential repercussions stemming from a decrease in visitor numbers continue to be a pressing concern for the local economy. Different nations hold diverse perspectives when it comes to embracing crypto innovation. While some countries exhibit openness and support, others approach it cautiously and sceptically.
Within the crypto community, there is a shared hope that fostering increased dialogue and providing comprehensive education will help bridge the gap, promoting mutual understanding and cooperation between crypto enthusiasts and regulatory bodies.
Frequently Asked Questions
What Are the Consequences if I Use Cryptocurrencies for Payments?
Tourists who violate the ban on cryptocurrency payments may face severe penalties, including up to one year of imprisonment and fines of up to 200 million rupees (Approximately $13,000).
Are There Businesses in Bali That Accept Cryptocurrencies?
While the use of cryptocurrencies for payments is banned, there have been reports of some businesses in Bali accepting cryptocurrencies. However, it is important to note that these businesses violate the regulations, and engaging in such transactions can have legal consequences.
What Is the Current Sentiment within the Crypto Community Regarding Bali’s Ban on Crypto Payments?
Opinions within the crypto community regarding Bali’s ban on crypto payments vary. While some may view the ban as reasonable considering local regulations, others express dissatisfaction and hope for increased acceptance and integration of cryptocurrencies.