JAKARTA, Jan. 22 (Xinhua) -- Indonesia's agency overseeing operation of financial service firms, OJK, banned those firms in adopting bitcoin, digital money or cryptocurrency in their transactions across the country, its Chairman Wimboh Santoso said here on Monday.
The ban from using cryptocurrency abides by Law No. 7/2011 of the country that stipulates national currency rupiah is the only authorized currency allowed for transactions in Indonesia.
"Financial service providers in Indonesia were strictly banned from taking bitcoin in their transactions. There were sanctions for those violating this rule," Santoso said.
Indonesian authorities were now intensifying investigation into the increasing use of bitcoin for transactions conducted in Indonesia's resort island of Bali, he added.
The investigation was carried out since late last year following the finding of online advertisements of several businesses on the island that accepting bitcoin for the payment of their services.
"We have learned several advertisements in the social media, we understand that Bali has now turned to be a haven for those using bitcoin in their transactions," Head of Indonesia central bank, Bank Indonesia (BI)'s Bali Chapter Causa Iman Karana said last week.
Payments with bitcoin in Bali were mostly conducted by foreign tourists, he added.
In coordination with provincial police, he said that BI would enforce the existing law in Bali by banning the use of bitcoin in every transaction.
BI already issued a ban against cryptocurrency transactions, saying that the bitcoin mechanism tends to be speculative, has high risk as there is neither underlying asset nor official regulator to manage its circulation.