Indonesia’s regulator has prohibited financial institutions from offering crypto services to protect investors against risks involved in investing in digital assets.
The Indonesian regulator, Otoritas Jasa Keuangan (OJK) has issued a warning to financial institutions across the country against offering crypto services to customers, according to a Reuters report on Tuesday.
“OJK has strictly prohibited financial service institutions from using, marketing, and/or facilitating crypto asset trading,” the regulator said in an Instagram post.
The financial regulator noted that the move was made in a bid to protect investors from the highly volatile trend of crypto assets.
“Please beware of allegations of Ponzi scheme scams in crypto investments,” the regulator added.
Notably, Indonesia allows the offering of crypto services in the form of their investment products, which are being overseen by the trade ministry and the Commodity Futures Trading Regulatory Agency.
The ministry is presently working on establishing a different market for crypto assets dubbed the “Digital Futures Exchange,” which will launch soon.
Interestingly, investors in Indonesia have shown huge interest in crypto assets despite strict regulatory measures in the asset class by the country’s financial watchdogs.
Total crypto transactions in 2021 amounted to $59.83 billion compared to just $4.2 billion in the previous year, according to data by the trade ministry.
According to data by the Indonesian Blockchain Association, it is estimated that over 7.4 million Indonesians own crypto as of July last year, which is double the figure in 2020.
Crypto is Illegal For Muslims
Meanwhile, crypto continues to face backlash not just from regulators but also from organizations across the country.
Just late last year, the National Ulema Council (MUI) – a religious organization in Indonesia that has the power to influence government decisions, declared that crypto has become illegal for Muslims.
The organization noted that the move was made due to the inability of the asset class to comply with Shariah law and show clear benefits.
However, the declaration does not mean crypto trading will be banned across the country but can discourage individuals from investing in digital assets.
Source: https://coinfomania.com/indonesia-bans-banks-from-offering-crypto-services/#utm_source=rss&utm_medium=rss&utm_campaign=indonesia-bans-banks-from-offering-crypto-services