Indonesia warns against Bitcoin usage

Summary:The central bank said the digital currency was not covered under any regulations, and highlighted the risks involved in transaction security.

The Central Bank of Indonesia is advising against the use of Bitcoin, due to the risks of the digital currency in being unregulated under current laws.

Without regulations specifically covering Bitcoin, there will be risks in transaction security, noted the central bank's deputy governor Ronald Waas, according to Indotelko.

Waas highlighted three particular monetary laws which indicated Bitcoin was out of legal coverage, under the Bank Indonesia Law, Information and Electronic Transactions (ITE) and various currency legislation.

Under regulation no. 7 year 2011 payment system or every transaction in Indonesia must use Rupiah, Waas pointed out, in the article. "Is Bitcoin considered as Rupiah?"

For Information and Electronic Transactions, every public service involving technology needs to have the equipment used by the services be certified by the Ministry of Communication," he added.

The central bank deputy governor added under currency regulations, only the Rupiah was legal tender.

However, Waas admitted that there were currently no laws prohibiting the use of Bitcoin, and could only warn citizens about the potential security risk in unregulated transactions. He added the central bank has yet to receive any official complaint from the community over the digital currency and would continue to monitor its adoption.

Topics: E-Commerce, Banking, Government : Asia

About

Loves caption contests, leisurely strolls along supermarket aisles and watching How It's Made. Ryan has covered finance, politics, tech and sports for TV, radio and print. He is also co-author of best seller "Profit from the Panic". Ryan is an editor at ZDNet's Asia/Singapore office.

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