Indonesia To Legislate Bill For Acceptance Of Bitcoin As Legal Tender
Indonesia’s Commodity Futures Trading Regulatory Agency, also known as Bappebti, had in June 2018 signed a decree to make cryptocurrency a commodity legally acceptable on stock exchanges.
The regulatory agency disclosed that the Indonesian government would soon make the necessary corresponding legislation to regulate currency exchange companies, taxation, and other related matters.
Bappebti approved a regulation to recognize Bitcoin and other cryptocurrencies as a legal trading commodity. The legislation also gives legal backing to cryptocurrency exchange firms already operating in the country.
The new policy outlines a set of regulations with regard to cryptocurrency circulation in the country. It particularly requires cryptocurrency exchange firms to comply with risk assessment, anti-money laundering (AML) and combating the financing of terrorism (CFT) laws. In addition, the policy also states that cryptocurrency traders must keep records of the transaction for at least five years and have a server located within the country.
The Head of the agency, Indrasari Wisnu Wardhana revealed that with the introduction of the new legislation, the agency hopes to “give cryptocurrency investors protection against fraudulent sellers”
However, the head of the Payment System Policy Department in the Bank of Indonesia (BI) Onny Widjanarko disclosed that “Bank of Indonesia still prohibits Bitcoin or crypto as a means of payment. A commodity is not an area of the bank, but we are concerned about the above.”
Although Indonesian Bitcoin brokers have expressed their dissatisfaction with regulators following the new capital requirements that were introduced in October 2018, the new policy requires brokers to have at least 70 million dollars to launch futures trades.
The Bank of Indonesia, with its headquarters situated in Jakarta, Indonesia, is the central bank of the country and sole the issuer of Indonesia’s legal tender currency – the Indonesian Rupiah.
It is noteworthy that the bank is independent of the government and operates a typical central bank like organization, making it contemporaries to many other central banks in the world.
In addition to its primary responsibility of maintaining the general stability of money and prices the Bank is also entrusted with the function of, maintaining financial stability and sustainability, increasing and reassessing the effectiveness of the country’s monetary management, maintaining an efficient banking system for its citizens, issuing legal tender currency as well as to overseeing payment systems.
Recently, the bank unveiled plans to retain its monetary policy rate for the third successive month after a two-day meeting of its governing board last week. The apex financial institution also vowed to continue in its efforts to make sure sufficient liquidity in the banking sector is achieved in other to encourage loan growth this year.
During the meeting, the bank also decided to maintain its seven-day reverse repo rate at 6 percent while the lending facility and deposit facility rates were also remained 6.75 and 5.25 percent, respectively.