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In order to ensure that the national prohibition of digital currency transfers is upheld, the Central Bank of Indonesia has asked supervisors to monitor the banks of the country.

During a virtual seminar, the governor of the Central Bank, Perry Warjiyo, said that local institutions and payment providers are not allowed to make or accept payments in digital currency and that this is not a legal instrument for payment following the Constitution, the Law on the Bank and Currency of Indonesia.

He said that the Bank would dispatch field supervisors to guarantee that the procedures are implemented nationally, with substantial penalties in force for those who fail to comply.

The prohibition on payments to digital currencies had been introduced in late 2017, following the Central Bank’s decision to stop the digital currency processors a year before. In addition, despite the restriction on digital currency as a speculative commodity, the Commodity Futures Regulatory Agency of Indonesia set in early 2019 regulations which have created opportunities to trade digital currency by local exchanges.

The precise guidelines lay down provisions governing the trading in the stock market of crypto-asset as commodities subject to future contracts and other derivative contracts.

The new announcement follows a week after it was reported that Banco Indonesia collaborated with many other countries across the world to issue a digital central bank currency or CBDC. It is because digital payments have increased by 60,3% last year, and that settlement values peak at 217,4 billion dollars.

On social networks, the central bank stated its state-backed currency is consistent with the politics of increased economic digitalization and will link with the Bank’s broader currency objectives.

The Bank is joining central banks representing around 20% of the world population in developing strategies for digital currency implementation in the preparation of the CBDC.

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