In 2021, Cryptocurrencies, especially Bitcoin faced numerous criticisms especially from governments across the world. Cryptocurrency received backlash because of a number of reasons out of which being used to fuel terrorism and for money laundering stood out the most.
Last year, China which was a hub for cryptocurrencies swept the country totally clean of them. The country’s government recently announced its e-yuan wallet for its central bank digital currency and is encouraging the use of it. The crackdown by Chinese regulators wiped off more than $400 billion from the crypto market last year and also contributed to the extreme fluctuation faced by cryptocurrencies (mostly Bitcoin) last year. The use of cryptocurrency was declared illegal in China last year. In Africa, another place where the use of cryptocurrencies spiked astronomically, many governments frown at cryptocurrencies. Africa’s giant, Nigeria, placed a ban on cryptocurrencies. According to the country’s apex bank, they were helping people launder money as well as sponsor terrorism even though it was evident that cryptocurrency was providing both job opportunities and contributing quite significantly and more positively to the country. It subsequently announced its central bank digital currency called the e-naira.
Recently, Russia’s apex bank proposed the ban of cryptocurrencies in the country out of concerns of being a threat to financial stability, the country’s monetary policy sovereignty, the wellbeing of citizens, etc.
Indonesia is the latest country to take its aversion for cryptocurrencies to the next level.
On Tuesday, Indonesia’s regulator warned financial firms in the country from enabling and/or facilitating crypto operations. The new warning comes amid a boom in crypto trading in the country. The Financial Services Authority (OJK) emphasized that crypto trading was extremely risky as they are characterized by extreme volatility. The regulator also added that people indulging in crypto may not fully understand the risks involved.
An Instagram post by the regulator read “OJK has strictly prohibited financial service institutions from using, marketing, and/or facilitating crypto asset trading. Please beware of allegations of Ponzi scheme scams in crypto investments”.
According to ministry data, in 2021, Indonesia’s trading transactions reached 859 trillion rupiah ($59.83 billion). In 2020, the record stood at just 60 trillion rupiah. Indonesia allows sales of crypto assets in the commodities exchange and trading is supervised by the trade ministry and the Commodity Futures Trading Regulatory Agency, not by the OJK. The ministry is currently facilitating the set up of a separate bourse for digital assets, called the Digital Futures Exchange, which officials say will be launched in the first quarter. Even with this, cryptocurrencies cannot be used legally for transactions.
The warning comes on the heels of similar concerns of the apex banks in Singapore and Thailand.
El Salvador remains the only country that has fully embraced crypto. In 2021, the country adopted Bitcoin as a legal tender and also announced that it was building a new city totally based on Bitcoin called Bitcoin City.