The central bank of the Republic of Indonesia, Bank Indonesia, has banned local banks from using cryptocurrency as legal tender or other financial services tools, Tempo.co has learned, citing Bank Indonesia Governor, Perry Warjiyo.
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According to Warjiyo, cryptocurrencies cannot be legitimate payment tools under the Constitution, Bank Indonesia Law, and Currency Law. He also added that the watchdog will form field supervisors to ensure financial institutions conform to the rules.
Bank Indonesia's decision to limit cryptocurrencies' turnover comes after Warjiyo announced plans for Indonesia to launch its own central bank digital currency (CBDC) as the country faces a digital payments boom during the COVID-19 pandemic. According to the watchdog data, transaction frequency of digital banking in Indonesia increased by 60.3% to more than 570 million times in April.
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