Indonesia bars financial institutions from offering crypto services
- Reference: 1643267587
- News link: https://www.theregister.co.uk/2022/01/27/indonesia_cryptocurrency_trading_ban/
- Source link:
In the tweet below, Wimboh Santoso, commissioner of Indonesia's financial services authority the Otoritas Jasa Keuangan (OJK), states that the agency has prohibited financial service institutions from using, marketing, and/or facilitating crypto asset trading. In a later tweet, Santoso warned that his agency does not regulate crypto trading and that the value of crypto assets can fluctuate widely.
OJK Tegas Larang Lembaga Jasa Keuangan Fasilitasi Kripto.
Sobat OJK, OJK dengan tegas telah melarang lembaga jasa keuangan untuk menggunakan, memasarkan, dan/atau memfasilitasi perdagangan aset kripto.
Waspada terhadap dugaan penipuan skema ponzi investasi kripto ya Sobat. [1]pic.twitter.com/BZmjoI2Ulr — OJK Indonesia (@ojkindonesia) [2]January 25, 2022
The regulator also warns of Ponzi schemes – investment scams that pay existing investors with funds collected from new investors – associated with cryptocurrency investment.
Indonesia is the world's fourth most populous country, and its sixteenth-largest economy. The nation is also the president of the 2022 meetings of the G20 group of nations and has made small business participation in the digital economy one of its priority issues in that forum. It also has a majority Muslim population, and local religious authorities have advised that cryptocurrency is not a suitable currency or investment for the faithful.
The nation's government also allows crypto mining.
[3]
The new advice therefore restricts crypto trading but falls well short of a ban.
[4]Mozilla founder blasts browser maker for accepting 'planet incinerating' cryptocurrency donations
[5]Two sides of the digital coin: Ill-gotten gains in cryptocurrencies double, outpaced by legit use – report
[6]Indonesian President's COVID jab cert leaks – authorities argue that's perfectly reasonable
[7]Indonesian authorities probe million-record leak from national COVID app
But it also follows Russia's [8]proposed ban on cryptocurrency on grounds including its riskiness as a retail investment. China has also opposed cryptocurrency for the same reason, and plenty of financial regulators around the world have warned of their unhelpful volatility.
That volatility has been on full display in recent weeks. The value of Bitcoin has fallen 28 per cent, Ethereum fell 40 per cent and Litecoin dropped by 31.5 per cent.
[9]
Many cryptocurrency advocates have suggested the digital dollars will do well in emerging economies. Indonesia may just have weakened that theory a little. ®
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[1] https://t.co/BZmjoI2Ulr
[2] https://twitter.com/ojkindonesia/status/1485774685505998849?ref_src=twsrc%5Etfw
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_security/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2YfJ7Wrz9mBvSe8o5x7aH8QAAAAA&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[4] https://www.theregister.com/2022/01/05/mozilla_accepts_cryptocurrency/
[5] https://www.theregister.com/2022/01/07/cryptocurrency_crimes/
[6] https://www.theregister.com/2021/09/06/joko_widodo_vaccination_certificate_leak/
[7] https://www.theregister.com/2021/09/01/indonesia_ehac_covid_app_pii_leak/
[8] https://www.theregister.com/2022/01/21/russia_cryptocurrency_ban_consultation_paper/
[9] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_security/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YfJ7Wrz9mBvSe8o5x7aH8QAAAAA&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[10] https://whitepapers.theregister.com/
Getting closer to a bank run?
If enough investors pull out, could we have the equivalent of a Bitcoin Bank Run? If you consider Bitcoin a currency, then its value is upheld by trust. No reason why that trust should survive forever, even though it seems like there are lots of fools and their money to keep the thing running for quite a while. If it's an investment (and let's face it, people 'invest' into crypto), the same issues apply.
As opposed to government-backed currencies (or established companies / commodities), crypto schemes are only backed by private entities without any meaningful history that would foster long-term trustworthiness. And don't tell me that you don't need trust crypto, because crypto ... If people stop accepting your currency, the value goes to zero. The value is tied to others accepting your currency and not tied to a nice picture on a dollar bill or a nice crypto scheme on somebodies computer.
It may take a while, or maybe the crypto schemes will just fade away -- but I predict that a nice cataclysmic run will wipe out most crypto schemes at some point within this generation (or the next). There is, of course, only one way to accelerate the run: talk about it wherever you can. Erosion of trust can be a self-fulfilling prophecy :).
Re: Getting closer to a bank run?
The only problem with that is the exchanges. Every time a remotely large sell-off has started in the past, all the exchanges have historically had "unexpected outages" and "scheduled maintenance", conveniently stopping anyone else selling off their kleptocurrency.
Then Tether warms up the printer and creates several million USDT out of thin air to bump the price back up.
Re: Getting closer to a bank run?
"Then Tether warms up the printer and creates several million USDT out of thin air to bump the price back up."
That only works if people are willing to by those Tether millions. If no one is wanting to buy the crypto, and everyone wants to sell than the value goes to 0... And there is bugger all that the Scammers - Sorry Crypto experts - can do about it except try to drum up some more spin...
Re: Getting closer to a bank run?
It's not just Tether in on the stablecoin fraud. USDC prints have gone parabolic in recent months, but neither they or Tether are audited so no one knows where this money is coming from. The only possible conclusion is that it's all imaginary funny money.
The whole cryptocurrency space is rotten to the core. Scams, rug pulls, market manipulation, wash trading and exchanges that collude and actively conspire against their own customers. On the bright side, there are headwinds looming for crypto. Increasing scrutiny from authorities, rising interest rates and feds turning off the cheap money taps are going to come to bear on the biggest pyramid scheme in history.
Confusion reigns.
I do wish that people would stop using the word "crypto" as shorthand for cryptocurrency.
When I read the headline I thought "Wait a minute, a bank is stopping people encrypting their dealings with the bank?"
It turns out on reading the piece that it was on the dubious practices of the cryptocurrency world and not what I had originally thought.
Now I know that in writing a headline you need to be concise and attention grabbing but I think that this example was downright confusing.
Good
The more countries hit the brakes on this despicable market, the better.