Indonesia’s financial market regulator, the Otoritas Jasa Keuangan (OJK) has proscribed cryptocurrency trading activities for all banking of financial services providers operating in the country. According to the Google translation of the message posted on the agency’s official Instagram account, the OJK said finance-based outfits cannot use, market, or facilitate digital currency trading.
In a more personalized manner, the OJK said citizens should be more cautious of Ponzi schemes – most of which are now being linked to cryptocurrencies.
“Beware of suspected crypto investment Ponzi scheme scams, my friend. Crypto assets themselves are a type of commodity that has fluctuations in value which can go up and down at any time so people must understand the risks. You also need to know that OJK does not supervise and regulate crypto assets,” an excerpt of the post reads.
Indonesia is undoubtedly a fast-growing crypto hub. While it is not uncommon to find unscrupulous actors sabotaging the nascent cryptocurrency industry, many innovative startups are springing up from the region, lending credence to the good use the new economy being heralded by digital currencies can be put to.
The ban on crypto for financial services players echoes the sentiments from a number of Indonesian Islamic groups, most of whom have criticized digital assets saying they are haram according to Islamic tenets.
While it is unclear whether the OJK instituted the ban in accordance with the recommendation from these bodies which includes the Nahdlatul Ulama, the Ulema Council, and the Muhammadiyah, the move is billed to stump the growth of the crypto ecosystem in the country to an extent.
Indonesia’s Regulator Bitcoin Ban May Breed New Innovation
Over the past couple of years, many financial regulators around the world have taken the cautious step to ban digital currencies from their shores. Prominent names in this regard include the Central Bank of Nigeria (CBN) and the People’s Bank of China (PBoC) whose Bitcoin ban moves have been criticized heavily by Edward Snowden.
Despite these bans in these regions and others contemplating related moves such as the UK, crypto players have often developed more innovative approaches to sustain their activities in the ecosystem.
In the case of Nigeria for example, the crypto-savvy population have taken a very serious liking to Peer-2-Peer transactions, and are prominently ranked as one of the top venues for these trading model on Binance exchange in Africa.
The ban by the Indonesian OJK may help prepare a safe landing for the country’s proposed digital currency, it may also breed further innovations that will largely help maintain the interest of the populace in the growing monetary revolution.