Crypto enthusiasts planning a vacation to one of Indonesia’s most popular tourist destinations, Bali, have been cautioned against using digital assets as a form of payment. The governor of Bali, Wayan Koster, has reportedly stated that those using crypto to pay for accommodation, restaurants, activities, or shopping will face serious consequences, as both crypto and foreign currencies are not recognized legal forms of payment in Indonesia.
Non-compliance with this regulation could potentially lead to individuals being deported, sanctioned, or even criminally penalized. Businesses offering the option of crypto payments may risk closure. The only accepted form of payment in Indonesia is the Indonesian rupiah.
Reports suggest that the use of crypto as payment for goods and services, particularly in the major tourist hotspot of Seminyak, has been on the rise. Governor Koster has recently taken a stronger stance towards foreign tourists, even proposing a “quota system” to control entry to the island due to concerns about tourist behavior.
Bali is attempting to find a balance between welcoming tourists back to its shores in the post-COVID era and managing the sudden influx of new visitors. The island had closed its borders to outsiders in March 2020 and remained closed for nearly two years before opening up again slowly, starting in February of the following year.
From 2020 to 2022, foreign tourism in Indonesia plunged over 75% from pre-pandemic figures, heavily affecting tourism businesses. Some of these businesses, backed by Jakarta, the country’s capital, are exploring the use of digital assets, specifically NFTs, to increase investment and attract foreign interest.
Although Indonesia formally recognized crypto as a commodity in 2018, allowing its trading via centralized exchanges and legal holding by individual investors, strict regulations still apply. As of 2019 and 2020 regulatory provisions, only 229 such assets are allowed for trading by licensed entities that comply with Bappetbi, Indonesia’s regulatory body for futures trading. Crypto remains strictly prohibited as a form of payment.
As the Indonesian government continues to grapple with balancing the economic growth brought by foreign tourists and the risks associated with unregulated digital assets, it remains to be seen how the crypto landscape will adapt to these evolving regulations. While the country has made strides in acknowledging the value of digital assets, the recent warning to tourists highlights the challenges that both businesses and visitors face in navigating the complex world of cryptocurrencies.
Source: Blockworks
