So what do these three categories have in common?
Indonesian government last month banned the cryptocurrencies altogether citing the national security reasons and its effect in weakening Rupiah, which is the most volatile currency in entire South East Asia. [1] “We will ban financial technology, e-commerce, and payment system services company that use and process virtual currency,” claimed Agus Martowardojo, who is the director of Bank Indonesia, on Indonesian news site id.techinasia.com.
The technique involved in banning the cryptocurrencies are very easy on their face value. They target e-commerce platforms, payment sites, and banks do not allow any exchange in cryptocurrencies. But it’s clear from these attempts that the governments don’t realize how the blockchain technology on which these cryptocurrencies are based operate. It’s essentially decentralized and autonomous where miners use servers to perform complex equations which are mined to create a set of numbers which are utilized in peer to peer transactions whose ledgers are recorded by a dedicated server maintained by users across borders.
Indonesians employed their government to stop the transactions in all three leading banks in the country but the shock came after the tourism hotspot Bali became a sort of heaven for the use of cryptocurrency especially Bitcoin and government was forced to re-issue the warning. The reason for this huge transaction was the favorability of tourists mainly from the Western nations and East Asia who preferred paying in bitcoins during the holidays. This trend was magnified when the expat community in Bali also favored the payments in Bitcoins which increased the transaction in Bali manifolds.
Causa Iman Karana who heads the Indonesian bank in Bali claimed that he knew this fact after reading a social media post which designated Bali as a favorite spot for Bitcoin transaction. So now, they are reissuing the order and also cooperating with local the police to enforce the transactions in Rupiah. [2]
Also, Agusman Zainal who Bank of Indonesia’s spokesman is declared that these transactions on Bali have violated Law No. 7/2011 of the Indonesian law. This ban has detailed description in bank regulation No. PBI: 19/12/PBI/2017 which deals with financial technologies. [3]
This response is unprecedented in its authoritative nature and actually aims at punishing the shopkeepers who allowed the bitcoin transactions in the tourist haven of Bali. Is this response too drastic? Will Indonesian government succeed in its clamp down? Will this model of crackdown be imitated across the globe especially in developing world where there is a real chance of devaluation of national currencies?
As the ancient Chinese masters would say, “Interesting times to live in”.