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Economy

Bank Indonesia declares bitcoin payment illegal

Cryptocurrency's volatility poses 'huge risk' to economy, central bank says

ERWIDA MAULIA, Nikkei staff writer | Indonesia

JAKARTA -- Indonesia's central bank on Thursday said it had issued a new regulation prohibiting the use of cryptocurrencies -- including bitcoin -- in the country, as their rising popularity has raised concerns over unwanted impacts on the economy.

Bank Indonesia had for some time said that the use of cryptocurrencies ran contrary to Indonesia's law mandating the use of rupiah in domestic transactions. The new regulation on financial technology signed on Nov. 29, however, is the first time that the central bank specifically mentioned that "the use of virtual currencies in payment system [and] activities ... is prohibited."

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