Foreign tourists in Bali, Indonesia, will no longer use cryptocurrencies as payment after the Bali Provincial Government banned the usage of digital currencies such as bitcoin (BTC) or USDT.
Bali governor Wayan Koster voiced his concerns during a statement to local media on May 28. He stressed that tourists who use crypto and engage in other forbidden activities that breach their visa permits would face immediate and harsh consequences.
Bali’s crypto ban and its Implications
With over 6 million foreign visitors flocking to Bali each year before the pandemic, cryptocurrencies have become a convenient payment option for accommodations, dining, sightseeing, and retail therapy.
However, the governor drew a parallel between the use of digital assets and narcotics, leaving no doubt about the gravity of the situation and the harsh penalties that await transgressors. Consequences may range from deportation and administrative sanctions to criminal penalties, business closures, and other strict measures.
Indonesia’s strict currency laws already impose fines and imprisonment on individuals conducting transactions with currencies other than the Indonesian rupiah.
The Bali government’s crackdown extends beyond tourists to encompass foreign exchange businesses. Unauthorized operations could lead to imprisonment and fines, reaching $1.4 million.
While cryptocurrencies are not explicitly banned in Indonesia, Director Trisno Nugroho, head of Bank Indonesia, clarified that they are not recognized as a legitimate payment method within the country.
This aligns Bali with Thailand, another popular Asian tourist destination that has implemented similar restrictions on crypto payments, although crypto trading remains permissible.
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Although Indonesia has generally supported the digital asset industry, Bali’s recent move to regulate cryptocurrencies departs from this trend.
The country recognized bitcoin as a commodity, even establishing a regulatory framework for crypto platforms and exchanges.
Furthermore, reports suggest that the Ministry of Trade plans to launch a national crypto stock exchange by June after facing delays since its initial projected launch in late 2022.
The crackdown on cryptocurrencies in Bali has raised concerns about its potential impact on the tourism industry, which heavily relies on foreign visitors.
The ban on cryptocurrency in Bali could discourage crypto enthusiasts from selecting it as their preferred destination. It may cause some tourists to search for alternatives in countries more open to digital payments.
The Bali Provincial Government’s response to the current situation regarding cryptocurrency usage will significantly impact the region’s future adoption of digital assets. As a result, there is uncertainty surrounding using digital currencies in Indonesia.Additionally, concerns have been raised about Bali’s reputation as a popular tourist destination, leading to discussions among tourists and industry stakeholders about the potential economic impact on the island.
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