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Indonesian Regulator Gives Green Light for Crypto Futures Trading

Indonesia’s Futures Exchange Supervisory Board (Bappebti), a commodities market regulator under the country’s Ministry of Trade, has reportedly ruled that cryptocurrencies are commodities that can be traded on the country’s futures exchange.

According to a Jarkata Post report on Monday, the agency’s market supervision chief, Dharma Yoga, has confirmed the decision and said the ruling came after a four-month study period that examined the issue.

According to Yoga, the agency has now signed a decree to formalize the decision, potentially clearing the way for the launch of a bitcoin futures product in Indonesia.

Meanwhile, other regulations around cryptocurrency exchanges and related taxation in the country will also be revealed by the country’s central bank and its taxation agency, Yoga said.

The central bank, Bank Indonesia, suggested late last year that it would prohibit bitcoin payments in the country, and subsequently stated it does not recognize the cryptocurrency as a legal payment method. However, it did not mention cryptocurrency exchanges at the time.

Yoga further indicated that, in order to prepare a comprehensive regulatory framework, the agency is now requesting domestic cryptocurrency exchanges to submit regulatory proposals.

Indonesian rupiah via Shutterstock

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Indonesia Central Bank: Cryptocurrency Payments 'Not Legitimate'

Bank Indonesia has warned that cryptocurrencies may not be used for payments in the country.

The central bank published a press release on Saturday, stating that cryptocurrencies are not a “legitimate instrument of payment” in the country, as they do not comply with the 2011 currency act and are not issued by the Republic of Indonesia.

“Financial transactions conducted within the territory of the Republic of Indonesia, has to be fulfilled with Rupiah,” the currency act states.

As a result, the central bank said that payment firms are not allowed to make virtual currency transactions.

The central bank states:

“Bank Indonesia affirms that it forbids all payment system operator (principal, switching operator, clearing operator, final settlement operator, issuer, acquirer, payment gateway operator, electronic wallet operator, money transfer operator) and financial technology operators in Indonesia, both bank and non-bank institution, to process transactions using virtual currency, as stated in Bank Indonesia Regulation No. 18/40/PBI/2016 on Implementation of Payment Transaction Processing and Bank Indonesia Regulation No. 19/12/PBI/2017 on Implementation of Financial Technology.”

The warning makes no mention of cryptocurrency exchanges.

The news comes after the central bank revealed in early December 2017 that it was considering new regulations that would outlaw bitcoin transactions from 2018.

On the 20th of the same month, the bank issued a new regulation – No. 19/12/PBI/2017 on Implementation of Financial Technology – due to concerns over bitcoin’s potential use in terrorism financing, money laundering and drug trafficking.

In its latest warning, Bank Indonesia also warned “all parties” that buying, selling or trading cryptocurrencies come with “high risks,” as they are “highly volatile” and do not have backing from an authority, or underlying assets to support prices.

The note reads: “This means that virtual currencies are vulnerable to bubble risks, and susceptible to be used for money laundering and terrorism financing, therefore can potentially impact financial system stability and cause financial harm to society.”

With the new notice, Bank Indonesia joins a number of global central banks in issuing warnings as the prices of cryptocurrencies have soared amid what many in traditional finance have labelled a bubble. Countries including the U.K.IndiaRussia and more have recently cautioned investors and traders over the perceived risks involved in cryptocurrencies.

Bank Indonesia image via Shutterstock

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Indonesia's Central Bank Mulls Bitcoin Payments Ban

Indonesia’s central bank has revealed is considering new regulations that would outlaw bitcoin transactions from 2018.

Bank Indonesia’s head of transformation, Onny Widjanarko, said yesterday that the bank is seeking the ban due to concerns over bitcoin’s potential use in terrorism financing, money laundering and drug trafficking.

The central bank, which has the authority to decide policy on monetary affairs, is currently conducting a review to determine whether bitcoin would be regulated under existing e-money rules or in a separate framework addressing cryptocurrencies.

According to a report by The Jakarta Post, he stated:

“Currently, there is no single regulation for those who carry out transactions using bitcoin.”

The official further appealed to merchants not to accept bitcoin as a payment, saying Bank Indonesia would not be responsible for the losses incurred via bitcoin transactions.

Should Indonesia follow through with the plans, it would join other nations such as China in cracking down on cryptocurrencies. In early September, regulators banned ICOs and forced exchanges to close. However, transactions in bitcoin have not been outlawed.

Russia’s deputy finance minister also announced in September that he expects pending legislation on cryptocurrencies to feature a ban on payments.

Bank Indonesia image via Shutterstock

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at news@coindesk.com.