Tourists Warned Against Using Crypto for Payment in Bali
Bali has warned foreign tourists coming into the country against using cryptocurrencies as a form of payment for goods and services in the popular resort island of Indonesia. While crypto trading in Indonesia is legal, using crypto payments is a sign of violation that carries hefty penalties, including jail time.
According to the government-owned news agency Antara, on May 28 2023, Bali Governor Wayan Koster announced that tourists are not allowed to make payments with crypto and intend to curb the influx of foreign tourists to tackle problematic foreigners who violate the country’s laws.
Sanctions to be Faced by Violators
On May 28 2023, at the tourism development press conference hosted the same day as the announcement by the news agency Koster said:
“Foreign tourists who behave inappropriately, do activities that are not allowed in their visa permit, use crypto as a means of payment and violate other provisions will be dealt with firmly.”
The Governor added:
“The Indonesian rupiah is the only legal currency allowed as payment means, and the use of any other currency contravened Indonesia’s law and offenders could face one-year mprisonment along with a fine of up to 200 million rupiahs totalling $13,000.”
Insiders from Coininsider mentioned that the warning comes amid the Governor’s plan to implement a quota system to limit the number of foreign tourists who violate local rules.
In 2019 Bali’s tourism sector boomed and took a hit in 2020 during the COVID-19 pandemic, resulting in the Island closing international flights and severely restricting foreign tourists in the country. However, since Bali reopened its borders, the province has reported a rise in unruly behaviour from foreign tourists, causing issues for the government and locals.
According to reports, the Tourism Board in Bali is promoting an ad campaign asking travellers to behave more respectfully. It has proposed banning visitors from renting motorbikes to curb reckless driving. A tax on foreign tourists entering Indonesia has been advocated to discourage low-income visitors, and the immigration department in Bali has been busy deporting foreigners who have been working illegally on tourist visas or breaking local laws.
An article titled ‘It’s disgusting: Bali Locals are fed up with bad tourists’, details the build-up for officials to think of new ways to address offenders, which resulted in sanctions on crypto payments.
Bali’s Crackdown on Crypto
Apart from this new development from Indonesia, the entire ban dates back to June 16 2021, when the Central Bank of Indonesia banned using cryptocurrencies for payments. The country’s central bank warned all financial services providers to stop accepting crypto as payment from their clients despite the massive adoption surrounding crypto in recent months. According to a report, the Governor of Indonesia’s central bank, Perry Warjiyo, emphasised that using crypto as a payment method would no longer be condoned.
Warjiyo said:
“The restriction placed on using virtual currencies to make payments is not an entirely new concept, as it is based on already existing laws. Cryptocurrency is not a legitimate payment instrument under the Constitution, Bank Indonesia Law, and Currency Law.”
Warjiyo added, “[ensuring that] financial institutions conform to this policy, the central bank will mobilise field supervisors.” On May 28 2023, Bali’s Chief Police Inspector and the Head of the Bali Representative Office for Bank of Indonesia, the country’s central bank, Trisno Nugroho, attended the meeting. Nugroho said, “while crypto was acceptable in the province, its use for payment was not.”
Governor Koster noted:
“Foreign exchange business activities can only happen with permission from Indonesia’s central bank. Rupiah Indonesia’s currency is the only one that can be legally used for payments in the country. The uses of other currencies include imprisonment for one-year minimum and five-year maximum and a minimum fine of 50 million rupiahs and a maximum fine of 22 billion rupiahs.” Koster concluded, “violations will be subject to administrative sanctions in the form of written reprimands, obligations to pay fines, and prohibitions from payment transactions.”
According to Coinmap data, Bali has about 36 businesses that accept crypto. The government of Indonesia planned to set up a digital assets exchange which was publicly announced back in 2021. The crypto bourse was designed to be established by the end of 2022 when the Indonesian Ministry of Trade was supposed to act as a custodian and clearing house for the local cryptocurrency market.
During the NXC International Summit 2022, Deputy Trade Minister Jerry Sambuaga said, “The country is still planning to launch the crypto bourse, but the whole project has been delayed due to additional preparations.”
In Indonesia, using currencies other than the rupiah is prohibited, and fines for doing so include imprisonment of up to one year and a maximum penalty of 200 million rupiahs of about $13,300. The warning came after an investigation showed that several businesses, including restaurants, meditation studios and motorbike rental companies, accept crypto payments. Despite the ban on crypto for payment, Bali intends to roll out a national crypto exchange by June 2023.
