Indonesia’s Central Bank Considers Issuing Digital Currency to ‘Fight’ Crypto

December 2, 2021 Bitcoin.com

CBDC is a tool to combat Bitcoin, says Bank of Indonesia exec

November 30, 2021 Coin Telegraph

CBDC

“CBDC would be part of an effort to address the use of crypto in financial transactions,” Bank of Indonesia’s assistant governor Juda Agung said.

Central bank digital currencies (CBDC), digital versions of national currencies introduced in response to growing cryptocurrency adoption, would be an essential tool for combating crypto, according to the Bank of Indonesia.

The central bank of Indonesia is considering launching a digital rupiah to “fight” against cryptocurrencies like Bitcoin (BTC), Bank of Indonesia’s assistant governor Juda Agung said at a recent parliamentary meeting.

“A CBDC would be one of the tools to fight crypto. We assume that people would find CBDC more credible than crypto. CBDC would be part of an effort to address the use of crypto in financial transactions,” Agung stated, according to a Nov. 30 Bloomberg report.

The official noted that cryptocurrencies like Bitcoin are currently traded alongside commodity futures and regulated by the trade ministry despite severe impacts on the financial system.

The news comes shortly after the National Ulema Council (MUI), Indonesia’s top Islamic scholarly body, reportedly found cryptocurrencies like Bitcoin to be haram, or forbidden, by the tenets of Islam. The East Java branch of one of MUI previously issued a statement deeming the use of the cryptocurrency haram in late October.

As previously reported, the Indonesian government has taken a mixed stance on crypto regulation. Despite banning cryptocurrency payments back in 2017, local authorities have opted to keep cryptocurrency trading legal. In April 2021, Indonesia’s Commodity Futures Trading Regulatory Agency (Bappebti) of the Ministry of Trading reportedly announced plans to launch a government-backed crypto exchange in the second half of 2021.

While maintaining a mixed stance on crypto, Indonesian regulators have been increasingly looking at a potential CBDC. In May, the Bank of Indonesia Governor Perry Warjiyo announced plans to launch a digital rupiah as a legal payment instrument in Indonesia.

CBDCs like the Chinese digital yuan are apparently designed to curb cryptocurrency adoption as one of their key features. Indonesia is not alone in thinking that CBDCs can help governments combat crypto. In mid-November, Bank of Russia’s governor Elvira Nabiullina said that CBDCs should serve as a good option for governments to replace decentralized cryptocurrencies like Bitcoin.

Indonesian Religious Council Forbids Muslims From Using Crypto As Currency: Report

November 12, 2021 The Daily Hodl

Indonesia’s Islamic Authority Declares Cryptocurrency Haram, Forbidden for Muslims

November 11, 2021 Bitcoin.com

Indonesian Islamic Organization Says Crypto Is Forbidden for Muslims

November 11, 2021 The Crypto Briefing

Indonesia’s national Islamic council reportedly declares Bitcoin haram

November 11, 2021 Coin Telegraph

Bitcoin Price

While the MIU is a government-funded organization, its latest decision is not legally binding in Indonesia.

The National Ulema Council (MUI), Indonesia’s top Islamic scholarly body, has reportedly found cryptocurrencies like Bitcoin (BTC) to be haram, or forbidden, by the tenets of Islam.

Asrorun Niam Sholeh, chairman of MUI’s Fatwa Commission, confirmed the religious authority’s rejection of cryptocurrencies due to alleged elements of “uncertainty, wagering and harm.”

In order for the MIU to endorse crypto trading, cryptocurrencies like Bitcoin need to abide by Shariah guidelines as a commodity or a digital asset and show a “clear benefit,” Sholeh reportedly said following an expert MIU hearing.

The MIU discussed Bitcoin as part of the Ulama Fatwa Commission, which is designed to address some of Indonesia’s biggest social, political, economic and legal issues through the lens of Islamic law.

The MIU’s East Java branch previously issued a fatwa — a “formal ruling or interpretation on a point of Islamic law given by a qualified legal scholar” — declaring the use of cryptocurrency haram in late October.

While the MIU is a government-funded organization, the council’s latest decision is reportedly not legally binding. Despite the MUI admitting that the fatwa is not law in Indonesia, it still can be used as a source of “legislative inspiration,” according to some sources.

According to Bloomberg, the latest decision from the MUI doesn’t mean that all crypto trading will be stopped in Indonesia. However, the council could deter Muslims from investing in crypto and make local institutions reconsider issuing crypto assets.

The news comes shortly after Bitcoin briefly passed the $69,000 price mark for the first time in history on Nov. 10.

The Indonesian government has taken a mixed stance on crypto regulation. Despite putting a blanket ban on cryptocurrency payments back in 2017, local authorities have preferred to keep crypto trading legal. In August, local crypto exchange Pintu raised $35 million from some of the biggest investors in the crypto and blockchain industry.

Major Indonesian Islamic organization declares crypto ‘haram’ — or forbidden

October 29, 2021 Coin Telegraph

Coin Telegraph

The Indonesian Islamic group NU says crypto is too volatile to be legal under Islamic law.

The East Java branch of one of Indonesia’s largest Islamic organisations Nahdlatul Ulama (NU) has issued a Fatwa deeming the use of cryptocurrency ‘haram’, or forbidden, under Islamic law.

A Fatwa is a nonbinding legal opinion on Islamic law, which is reached through a discussion called a bahtsul masail. Representatives from the Nahdlatul Ulama (PCNU) Branch Management and several Islamic boarding schools throughout East Java attended the bahtsul masail.

Interest in cryptocurrency has surged in Indonesia over the past year. Earlier this month, a report by Coinformant reported that Indonesia saw a massive 1,772% increase in the number of people engaging with articles about crypto during 2021.

Indonesia is home to the largest population of Muslims in the world, and has a booming crypto industry. According to the Indonesian Trade Ministry, the nation had around 6.5 million crypto investors by May this year, overshadowing the 5.7 million retail investors registered with the Indonesia Stock Exchange (IDX).

An announcement published on the website of the East Java Nahdlatul Ulama branch on October 24, quotes chairman Kiai Azizi Chasbullah as saying:

“The participants of the bahtsul masail have the view that although the government recognises cryptocurrency as a commodity, it cannot be legalized under Islamic sharia law.”

The group came to the conclusion that cryptocurrency was deemed haram because it involves too much speculation, and therefore can’t be used as a legitimate investment.

“Based on several considerations, including the prevalence of fraud, it is considered unlawful,” said a representative from the Lirboyo Islamic Boarding School, Kediri.

Some Muslim scholars believe that cryptocurrency is similar to gambling, which is prohibited under Islamic religious law. However, opinions vary and other Islamic organizations around the world say that Islamic law permits cryptocurrency.

Last year the Malaysian authority that oversees compliance with Islamic law in finance announced that it would permit digital asset trading.

There are also efforts currently underway in Australia to build the world’s first Sharia-guided decentralized finance (DeFi) platform to navigate a course between the advantages of DeFi and the beliefs of Islamic finance.

In September, the Minister of Trade Muhammad Luthfi told local media that Indonesia didn’t plan to follow China’s footsteps and impose a ban on cryptocurrency transactions, mining or trading.

Islamic Organization in Indonesia Issues Fatwa Against Cryptocurrency

October 28, 2021 Bitcoin.com

Report: Indonesia leads global surge in interest in crypto

October 18, 2021 Coin Telegraph

Argentina

Indonesia saw a massive 1,772% increase in the number of people engaging with articles about crypto, a new survey claims.

Amid the ongoing growth in cryptocurrency adoption worldwide, countries like Indonesia and Chile have seen a significant influx of public interest in cryptocurrencies like Bitcoin (BTC), according to new data.

According to an Oct. 15 report by Australian blockchain education startup Coinformant, Indonesia has been leading the world in crypto interest dynamics in 2021.

*The fastest growing crypto hotspots. Source: Coinformant*

In Coinformant’s report, Indonesia achieved the highest crypto interest score of 5.73 out of 10, beating other counties in a combination of four factors like the number of Google searches, the amount of published crypto articles, engagement level increase and crypto ownership. Chile ranked second with a score of 5.26, with Argentina following with a score of 4.79.

Citing data from engagement platform BuzzSumo, Coinformant calculated that Indonesia has seen a massive 1,772% increase in the number of people engaging with articles about cryptocurrency year-over-year (YOY). The number of published crypto articles in Indonesia surged 133%, while Finland saw the largest such increase of 725%.

Indonesia also was the second-highest-ranking country in terms of increase in crypto-related Google searches over the past 12 months, surging over 572%. Chile reportedly outstripped Indonesia in this metric with 707% more Google searches YOY.

Citing data from Chainalysis’ crypto ownership data, Coinformant’s methodology also includes information on global crypto ownership. The report notes that Ukraine held the highest proportion of crypto, with more than 12% of the population owning cryptocurrencies.

Despite Indonesia winning the race in terms of overall crypto interest surge, the United States has been consistently the largest country in terms of crypto engagement and other factors, a spokesperson for Coinformant noted. “This report is about countries with the highest increase of these measures this year and it's worth noting when looking purely at volume, the USA consistently comes number one,” the representative said.

Despite putting a blanket ban on crypto payments back in 2017, Indonesian authorities have been kept cryptocurrency trading legal. In August, Pintu, a major Indonesian cryptocurrency wallet and trading platform, raised $35 million from some of the biggest investors in the crypto and blockchain industry.

Indonesia Will Not Ban Cryptocurrencies Like China, Minister Says as Crypto Trade Soars

September 25, 2021 Bitcoin.com

Indonesia

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