Indonesian authorities Oppose Crypto, Are open however to a CBDC

Indonesia’s top monetary watchdog, the Financial Service Authority (OJK), has prohibited domestic businesses from using, offering, or facilitating crypto services. The company believes that digital assets such as Bitcoin are incredibly risky due to their high price volatility.

Indonesian authorities have mostly taken a hostile stance against cryptocurrency over the past few months. Last November, the National Ulema Council (NUI) stated that digital assets are cursed by “uncertainty, wagering, and harm.” This resulted in the organization claiming that these investments should be “forbidden.”

Furthermore, the Tarjih Muhammadiya organization labeled crypto as unlawful for Muslims. They argued that digital asset values are speculative and not backed by other traditional assets such as gold.

According to a recent report by Reuters, “OJK has strictly prohibited financial service institutions from using, marketing, and/or facilitating crypto asset trading.”

Aside from its volatility, the country’s regulators point to Ponzi schemes in their fight against crypto. They believe that investors could fall victim to these scams and must be aware of all the risks surrounding the industry.

However, despite these negative viewpoints, the Indonesian government allows the selling of Bitcoin and altcoins on online exchanges. The Commodity Futures Trading Regulatory Agency supervises these operations. Nonetheless, citizens cannot use these assets for payments within the country.

While several authorities are opposed to private cryptocurrencies, the country is in favor of a central bank digital currency (CBDC). Last May, Bank Indonesia Governor Perry Warjiyo, said that the financial institution will launch a digital version of its national currency.

“A CBDC would be one of the tools to fight crypto. We assume that people would find CBDC more credible than crypto. CBDC would be part of an effort to address the use of crypto in financial transactions,” said Indonesia’s central bank.

Source: CryptoPotato