Jakarta - First heard the term Virtual Currency (VC) is when the Regulation of Bank Indonesia (PBI) no 18 of 2016 regarding the prohibition of payment system activities by using VC is announced.
The choice of this term is quite surprising because it does not use the commonly used cryptocurrency term, which is related to currency on the internet like Bitcoin, Ripple, Etherium, Litecoin, nxt, and so on.
The IMF as a credible international source, explains the definition of VC in a freely accessible paper here. VC is a digital representation of a value issued by a private developer with denominational determination in a separate unit.


VCs can be stored, accessed, and transacted electronically, and can be used for various transaction purposes as long as all parties agree to use them.
Virtual Currency
Virtual Currency goes into the concept of Digital Currency where in addition to VC there is electronic money or electronic money (EU). The difference between VC and EU is its publisher, where EU issuance is regulated by the government and uses the country's currency.
VC itself is divided into two types: convertible and non convertible. An example of a non-convertible VC is a game-coin where we can buy credits for weapon-upgrade purposes for example, but the remaining credits can not be refunded.
Interchangeable VCs can also be separated into two types: centralized or decentralized. Examples of interchangeable central VCs are WebMoney, a form of digital currency in which the centralized server is managed by one company.
Cryptocurrency
Well, the cryptocurrencies that we know today are generally included in the definition of convertible-decentralized VC. Using Blockchain's permissionless technology as the basis for its implementation, the cryptocurrency server is replicated, scattered with key chains of each block, which are technically very secure and to date have not been successfully unloaded.
Attack on one server by changing data without validation, will be rejected by other servers because it is known that the changes can not be verified. In essence, we can not double spend or edit our cryptocurrency value.
The critical point is not in the system but the greater risk is on the end point. The onslaught always leads to the owner of cryptocurrency, usually institutions such as exchangers such as Mt Gox and CoinCheck cases.
Photo: IMF
Confusion Definition
If the term "virtual currency" referred to by BI is in accordance with the definition proposed by the IMF above, would certainly stir the world of gaming. The purchase of in-game money units, whether in the form of gold, gems, coins, should be prohibited if done in Indonesian jurisdiction.
The ban is ludicrous for us connoisseurs of technology and innovation, but it makes sense when viewed from the eyes of the economy. In addition to the reason for violation of the Act, a transaction of value exchange not recorded by the financial authority, if the value is significant, it is feared will bring the phenomenon of shadow economy. This is dangerous because it will reduce the accuracy of the calculation of GDP so that it affects the state financial planning.
From the official FAQ from BI regarding banning Virtual Currency that can be accessed here, it seems BI tried to define its own VC terms. In the document mentioned directly the definition and example of VC which directly points to the definition of cryptocurrency as above and does not explain other VC categories as mentioned by the IMF. In other BI statements here also mention the term 'Bitcoin and other Virtual Currency'.
According to the author, it is very confusing, which virtual currency is banned transactions in Indonesia? Is a virtual currency in a broad version such as the definition of IMF, or is it just a cryptocurrency that is a decentralized and convertible-decentralized VC?
The understanding of the Virtual Currency retrieval background on the PBI above becomes crucial for the BlockChain researchers and developers who often use the 'currency unit' tool as the design of the application solution or business model. Of course this is the responsibility of BI as the financial authority, especially the supervision of financial transactions in accordance with the BI Law, Currency Act, and Fund Transfer Act.
BI itself has publicly stated that it is reviewing the digital Rupiah issuance plan and examines the role of BlockChain technology in the financial industry. Which is the next question, what form will be taken: electronic money, virtual currency, or there is a new classification outside the IMF paper?
The term definition is the main thing in a rule of law and usually becomes the first chapter. It would be nice to use standard and widely known terms instead of introducing new terms. So, Virtual Currency or Cryptocurrency, BI?
The author, Satriyo Wibowo (@sBowo) is a co-founder of Blockchain Nusantara a research forum in the field of blockchain, as well as IPv6 activist and Internet Jurisdiction in Indonesia Cyber Security Forum (ICSF)
https://m.detik.com/inet/cyberlife/d-3856913/virtual-currency-atau-cryptocurrency-bi#top