In a message to local media on May 28, Bali Governor Wayan Koster expressed his worries. He emphasized that visitors who use cryptocurrency or participate in other illegal activities in violation of their visa permits will face swift and severe repercussions.
Before the pandemic, over 6 million international tourists came to Bali annually, and now crypto is a practical way to pay for travel, food, lodging, and retail therapy.
However, the governor compared the use of digital assets to drug addiction, highlighting the seriousness of the problem and the severe punishments that await violators. Deportation, administrative punishments, criminal penalties, company closures, and other severe actions are only a few examples of possible consequences.
People who interact with currencies other than the Indonesian rupiah are already subject to penalties and prison time under the nation’s strict currency rules.
Apart from tourists, foreign exchange enterprises are also targets of the Bali government’s crackdown. Illegal activities may result in incarceration and penalties of up to $1.4 million.
Although cryptocurrencies aren’t outright forbidden in Indonesia, Director Trisno Nugroho, the leader of Bank Indonesia, made it clear that the nation does not accept them as a valid payment option.
Bali is now in line with Thailand, a well-known tourist destination in Asia that has put similar limitations on cryptocurrency payments in place, but trading in cryptocurrencies is still legal.
Despite Indonesia’s broad support for the digital asset sector, Bali has made a change by attempting to regulate cryptocurrencies.
It even established a legal framework for cryptocurrency platforms and exchanges after recognizing Bitcoin as a commodity.
Moreover, according to sources, the Ministry of Trade intends to open a national cryptocurrency stock market by June after experiencing setbacks since its first anticipated opening in late 2022.
Concerns have been expressed regarding the crackdown on cryptocurrencies in Bali’s tourism sector, which relies significantly on international tourists.
Bali’s prohibition on cryptocurrencies might discourage travelers who are interested in cryptocurrencies from choosing it as their vacation destination. Some travelers could look for alternatives in nations that accept digital payments faster.
The way the Bali Provincial Government responds to the present crypto usage issue will have a big influence on how widely digital assets are adopted in the future in the area. Because of this, employing digital currencies in Indonesia is questionable.
A conversation about the possible economic impact on the island has also been sparked by worries about Bali’s status as a top tourism destination among travelers and industry partners.
Before slowly reopening in February of last year, Indonesia’s borders were blocked to outsiders in March 2020 and stayed closed for over two years.
Foreign visitors to Indonesia decreased by more than 75% between 2020 and 2022 compared to pre-pandemic levels, which hurt many tourism-related firms.
In certain instances, companies are using digital assets, particularly NFTs, with the help of Jakarta, the nation’s capital, to increase investment and attract foreign interest.
Indonesia recognized cryptocurrencies as commodities in 2018, legalizing their trading on centralized exchanges and enabling private individuals to possess the asset class.
However, only 229 of these assets may be traded by organizations that have a license and follow Bappetbi, Indonesia’s regulatory authority for futures trading, under the regulatory law for 2019 and 2020.