The Indonesian finance watchdog Otoritas Jasa Keuangan (OJK) has warned the country’s financial institutions against offering or facilitating the sale of cryptocurrencies.
On Tuesday, OJK’s official Instagram account issued a warning about the increasing number of crypto-Ponzi schemes and the risk of crypto investments due to market volatility. The official publication also quotes chairman Wimbo Santoso as saying that financial institutions are strictly prohibited from offering cryptocurrency trading services in any form. The text of the official publication reads:
“OJK has completely banned financial institutions from using, selling and / or facilitating trading in cryptocurrencies.”
The current warning against investing in cryptocurrencies and banning cryptocurrency trading services for financial institutions follows several calls for banning the use of cryptocurrencies by leading Islamic NGOs in the country. As the Cointelegraph previously reported, a total of three Islamic organizations have issued fatwas against the use of digital currencies by Muslims, and consider it banned.
In October 2021, a major Islamic organization, Nahdlatul Ulama, declared cryptocurrency haram because of its allegedly speculative nature. One month later, the Indonesian Council of Scholars declared encryption a prohibited transaction tool. However, she pointed out that cryptocurrencies can be used as an investment tool if they comply with the principles of Islamic law. Muhammadiyah has become the third Indonesian Islamic organization to issue a fatwa against the use of digital currencies as payment and investment tools.
Indonesia has grown over the years to become one of the leading cryptocurrency economies in Asia. In 2021, cryptocurrency transactions amounted to 859 trillion rupees ($ 59.83 billion) compared to 60 trillion rupees ($ 4.18 billion) in 2020.
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Crypto-assets are regulated as tradable goods in Indonesia and are regulated by the Ministry of Commerce and the Commodity Futures Trading Regulatory Agency. The Ministry is currently working on creating an independent marketplace for digital assets called the Digital Futures Exchange, which is expected to be launched in the first quarter. However, cryptocurrency as a payment instrument is banned in the country.