Bitcoin's business is very lucrative, especially since its value has reached 20,000 USD Dollar by the end of 2017, from its current price of just 0.05 US Dollars per BTC. At Indodax, currently about 1.3 million active subscribers are registered as Bitcoin users. In addition, various companies, businesses, and retailers began to adopt crypto currency as a means of payment. However, what remains a big question now is: "Is Bitcoin according to OJK can be used as a legal means of payment?"
Although the price has started to fluctuate sharply at the end of 2017, but many investors are still interested to invest in Bitcoin, including investors from Indonesia. To better understand how Bitcoin lunge in Indonesia, here is a summary of the development of the OJK (Financial Service Authority) view of Bitcoin.
OJK View About Bitcoin Investment
"Bitcoin investments have not been officially permitted yet, the investment has not been set, as it has not been done publicly."
The above statement was issued on December 12, 2017 by Hoesen, Chief Executive Officer of OJK Capital Markets. On the same occasion, Hoesen also acknowledged that OJK would regulate Bitcoin investments in Indonesia, but he did not specify details. "We will arrange about it, actually there are regulations related to investment, especially investment of bodong", he said.
OJK also continues to appeal to businesses, corporations, and the wider community to always be careful in every investment made. They should review the legal basis and all the provisions pertaining to virtual investments such as crypto currency.
Hossen explained that OJK has a Website and Call Center that can be contacted anytime. Thus, people who are doubtful about any kind of investment in Indonesia can contact the OJK first to get the legal certainty regulation. In addition, Hossen also asserted that virtual currency including Bitcoin is an illegal payment tool, and there is a big risk behind its use.
OJK Still Discusses Bitcoin Regulation With BI
On Thursday, December 21, 2017, Wimboh Santoso, Chairman of the Board of Commissioners of OJK explained that his side is still discussing legal regulation with Bank Indonesia for digital currency, especially Bitcoin. He also revealed that as far as discussions have been conducted, there are several conclusions:
People should be well informed about the risks associated with investing or using Bitcoin.
Businesses that use Bitcoin as a means of payment must immediately report to OJK.
Wimboh further explains that Bitcoin can not yet be defined as a "product", so it has not been determined who will be in charge of its arrangements and oversight. "If payment system product, it means that Bank Indonesia is the authorized," he said.
Previously, Sir Mulyani as Minister of Finance has also explained that people should not speculate in digital currency such as Bitcoin. It is undeniably the price is high, but the public should be wise to choose a safe investment instruments and in accordance with government regulations. Moreover, Bitcoin is not a legitimate investment in Indonesia at the moment, and is not recognized as a legal means of payment.
In early 2018, there were 4 statements submitted by OJK on various occasions.
Sanctions for the reckless use of Bitcoin in Indonesia
Wimboh Santoso said that the entire financial services sector is strictly prohibited from providing facilities for Bitcoin transactions and other crypto currencies. He also added that if any sector of financial services violate, will be given strict sanctions. Any Bitcoin investments made, either through insurance or bank, must be reported to OJK prior to commencement.
Bitcoin is Prohibited Due to Potential Crime
On Tuesday, January 23, 2018, BI and OJK have issued a statement that Bitcoin and other crypto currencies are instruments that are still prone to be used for money laundering and terrorism financing. Thus, the perpetrators of trade transactions using Bitcoin as a means of payment will still be given sanctions. This strict prohibition still applies to financial service providers only, and the full sanction is revocation of operating licenses for the financial institution. As for society, Bitcoin education will be provided for self-protection actions and risk-related understanding of it.
Bappebti Still Assessing Bitcoin as a Trade Asset
On Friday, March 2nd, 2018, Task Force Chairman OJK Alert Investment, Tongam L. Tobing, said that "For Bitcoin as a commodity, while we do not yet know how the Ministry of Trade and Bappebti responded." Tongam also confirmed that OJK is continuing to coordinate with the Ministry of Trade and Bappebti on digital currency. Bank Indonesia (BI) as the legitimate financial regulator in Indonesia also participated in the coordination. Tongam explained that Bappebti will refer to the trade rules, not as a means of payment, as there is no valid means of transactions in Indonesia except the rupiah.
OJK Keeps Driving Blockchain Innovation Despite Bitcoin Ban
As mentioned earlier, OJK has repeatedly disclosed the prohibition against the use of Bitcoin as a means of payment or investment, especially for financial service providers. Fihtri Hadi, Director of Digital Financial Innovation OJK stated that "We will not support unclear instruments (Bitcoin and other crypto currencies)."
Although the role of Bitcoin as currency is not supported, OJK remains open if there are any useful Blockchain innovations other than Bitcoin. This is especially so if there is an innovation of technology utilization to solve inclusion and literacy problems, as well as financial transparency.
Related to its function in assisting financial transparency, many experiments have successfully used Blockchain to solve various problems, such as frequent forged LC (LC) validation. When used properly, the use of decentralized technology can make exports and imports more efficient. For the potential adoption of Blockchain, OJK is very open and will provide full encouragement.
In the Act, Bitcoin is Clearly Prohibited
At the pre-launching event of Crypto products by Aladin Capital (Thursday, January 25, 2018), Wimboh Santoso explained that BI (Bank Indonesia) has stated that Bitcoin and Altcoin are strictly prohibited in Indonesia if used as a means of payment. The legal currency for use in Indonesia is Rupiah only. In addition, the possibility of bubble risk on Bitcoin also potentially disrupts the stability of the state financial system.
In the Act it has been stated clearly that our currency is Rupiah. So any product that, if in addition to the rupiah is clearly prohibited, "said Wimboh.
Related Aladin Capital has just launched crypto-based investment products, Wimboh explained the OJK will conduct further checks. If Aladin Capital is a financial services agency, then reporting should be done before the product is launched. Conversely, if Aladin Capital is not a financial services institution, then supervision of relevant products can not be done, and the application will be rejected.
From the above discussion, it can be concluded that Bitcoin is illegal if used as a means of payment, but not yet clear status if used as a trading instrument or payment system.