Bitcoin Could Destabilize Financial System, Warns Bank Indonesia

Trading in cryptocurrencies such as Bitcoin could lead to losses and destabilize Indonesia’s financial system, declared Bank Indonesia in a fresh warning against the use of virtual currencies in the country.

“The ownership of virtual currencies is high risk and prone to speculation because there is no authority who takes responsibility, there is no official administrator and there is no underlying asset to be the basis for the price,” said BI spokesman Agusman, as quoted by CNBC.

Reiterating the message the Central Bank has stressed on numerous occasions in the past, Agusman stated cryptocurrencies could not be used as a means of payment in Indonesia as it is not legal in Indonesia.

“(Cryptocurrency) is not a legal medium of exchange. We remind (people of) its risks. When the risks occur, the losses will be borne by the public. We are obliged to protect consumers and protect them from a bubble,” Agusman said.

He added that virtual currencies are also a threat to the country’s financial stability and even security, as it could potentially be used in money laundering and also to fund acts of terrorism.

Last month, Bank Indonesia banned financial technology companies involved in payment systems from using cryptocurrencies in its transactions. It has also said that it is examining the need to regulate trading on virtual currency exchanges.

The Indonesian online cryptocurrency exchange, according bitcoin.co.id, is currently trading at over Rp.194 million per unit.

Photo by Techbu

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