Bank Indonesia’s governor says digital assets are being explored

Doni Primanto Joewono, the governor of Indonesia’s central bank has acknowledged that the nation is investigating the prospect of incorporating cryptocurrencies into its financial system.

Tempo started on July 12 when Joewono said that Bank Indonesia is currently among the worldwide institutions investigating the prospect of launching a central bank digital currency (CBDC) to satisfy various demands.

According to Joewon, the advent of cryptocurrencies has prompted various nations to investigate the possibility of CBDCs. Nevertheless, he cautioned that cryptocurrencies pose hazards to conventional financial institutions.

Joewono said that crypto-assets might contribute to the emergence of new dangers that could impact the stability of the economic, monetary, and financial system.

Currently, Indonesia is among the nations investigating the CBDC option, and a whitepaper is scheduled to be published soon.

The governor, addressing on the sidelines of the G20 conference, said that cryptocurrencies had attributes that may be advantageous to the present financial system, such as boosting efficiency and inclusivity.

Indonesia’s crypto regulatory framework

Despite Joewono’s indication of a favourable stance towards cryptocurrency, the government has historically established stringent regulations for the industry.

The Indonesian Financial Services Authority (OJK) issued a warning earlier this year that financial institutions are prohibited from marketing and assisting the trade of cryptocurrencies.

The regulator stated in a statement, “OJK has firmly forbidden financial service institutions from utilising, promoting, and/or supporting crypto asset trading.”

The regulator highlighted consumer protection in asserting that cryptocurrencies pose a significant danger. Notably, the warning appeared as Bitcoin’s popularity soared during a broader crypto market bull run.

In addition, the nation imposed a value-added tax (VAT) on cryptocurrency transactions and a capital gains tax on associated investments. According to Finbold, the taxing system is part of Indonesia’s effort to increase revenue collection in the wake of the economic consequences of the Covid-19 outbreak.

Also Read: Traditional Credit Cards Are Being Replaced With Crypto Credit Cards