Bali Takes Strong Stance Against Crypto Payments by Tourists

Bali wants to attract tourists, but wants to maintain control of how they might spend their money.

Banning Crypto Payments

Bali, a popular tourist destination in Indonesia, is cracking down on foreign tourists using cryptocurrencies as a means of payment. The Bali Provincial Government, led by Governor Wayan Koster, has emphasized that the only legal tender in the country is the Indonesian rupiah. The government has warned that strict actions, including deportation, administrative sanctions, criminal penalties, closure of businesses, and other tough sanctions, will be imposed on tourists violating these regulations.

The Legal Basis for Prohibition

The use of currencies other than the rupiah for payments in Indonesia is prohibited under Law No. 7 of 2011 on Currency. Violators can face imprisonment for up to one year and a maximum fine of Rp200 million (US$13,300). Additionally, the use of cryptocurrencies without permission from Bank Indonesia can result in imprisonment for a minimum of one year and a maximum of five years, along with a minimum fine of Rp50 million (US$3,300) and a maximum of Rp22 billion (US$1.4 million). Bank Indonesia Regulation No. 17/3/PBI/2015 further enforces the obligation to use the rupiah in Indonesian territory.

The meeting was attended by Bali’s chief police inspector and Trisno Nugroho, the head of the Bali Representative Office for Bank Indonesia — the country’s central bank.

Nugroho reaffirmed that trading crypto is allowed but the use of crypto for payments is banned.

— Cointelegraph (@Cointelegraph) May 29, 2023

Governor Koster’s Firm Stance

Governor Wayan Koster reiterated that cryptocurrencies are allowed as assets but prohibited as payment instruments. He emphasized that the Bali government will take decisive action against tourists who violate the regulations. The press conference on Bali’s tourism development was attended by Bali Police Chief Inspector General Putu Jayan Danu Putra and Trisno Nugroho, the head of the Bali Representative Office for Bank Indonesia.

🚨 SHOCKING: 🇮🇩 Bali Governor’s Bizarre Warning to Tourists: “#Crypto Payments Will Be Dealt With FIRMLY!” 😱

A thread 🧵 pic.twitter.com/JCdh2qBpLl

— Keyur Rohit (@CryptoKingKeyur) May 29, 2023

Crypto Acceptance in Bali

While some businesses in Bali have accepted cryptocurrency payments, Governor Koster’s announcement aims to discourage the use of digital assets for transactions within the region. Reports indicate that Bali-based businesses, including a meditation retreat, a motorbike rental business, and a crypto-themed cafe, have been accepting cryptocurrency payments. However, the governor’s strict stance suggests that such practices will face severe repercussions.

Balancing Tourism and Regulations

Bali has been working to attract tourists back after the COVID-19 pandemic, but it also aims to maintain control and regulate tourist behavior. The governor has proposed implementing a quota system to manage the influx of tourists and ensure compliance with regulations. The prolonged closure of borders significantly impacted the tourism industry, leading some businesses to explore the use of digital assets like NFTs to stimulate investment.

Regulatory Framework for Cryptocurrencies

Indonesia recognizes cryptocurrencies as commodities, allowing trading through licensed centralized exchanges. However, the use of cryptocurrencies as a form of payment is strictly prohibited. Regulatory provisions from 2019 and 2020 restrict trading to 229 specific assets by licensed entities under the supervision of Bappetbi, the regulatory body overseeing futures trading.

Conclusion

Bali’s strong stance against tourists using cryptocurrencies for payments underscores the government’s commitment to upholding regulations and ensuring the use of the Indonesian rupiah as the only legal tender. The crackdown aims to discourage such practices and maintain control over the tourist industry while balancing the need for economic recovery and responsible tourism.