Indonesia Crypto Payment Ban Explained: Why Crypto Can't Be Used for Payments Despite Legal Trading

Indonesia lets you buy, sell, and trade cryptocurrency - but you can’t use it to pay for coffee, groceries, or an international invoice. That’s the reality since 2017, and it’s still true in 2025. The ban isn’t a glitch or a temporary policy. It’s a deliberate, legally enforced split: crypto is a traded asset, not a payment tool.

Why Indonesia Banned Crypto Payments

The core reason is simple: the rupiah is the only legal currency in Indonesia. That’s written into the country’s Currency Law. Bank Indonesia (BI), the central bank, has held this line since 2016, when it issued Regulation No. 18/40/PBI/2016. This rule made it illegal for any payment system operator - including digital wallets, payment gateways, and money transfer services - to process transactions using Bitcoin, Ethereum, or any other crypto asset.

In November 2025, BI doubled down on this stance. Agusman, Executive Director of the Department of Communication, publicly confirmed: “Virtual currency including Bitcoin is not recognized as a valid payment instrument. It is prohibited to be used as a means of payment in Indonesia.” The reasoning? Financial stability. BI worries that if crypto became a mainstream payment method, it could undermine monetary control, trigger currency substitution, and expose consumers to wild price swings without any safety net.

Unlike Thailand or Singapore, where crypto payments are allowed under strict conditions, Indonesia chose a hard line. Even though crypto trading is booming - with 14.3 million active users and IDR 127.5 trillion ($8.1 billion) traded in 2024 - the payment ban stays firm. The message from BI is clear: you can invest in crypto, but you can’t spend it like cash.

Who Regulates Crypto Now? The OJK Takeover

While BI blocks payments, a different agency runs the trading side: the Financial Services Authority, or OJK. On January 10, 2025, oversight of crypto assets officially moved from Bappebti (the commodity futures agency) to OJK under Regulation No. 27 of 2024.

This wasn’t just a paperwork change. It was a strategic shift. Crypto was reclassified from a “commodity” to a “digital financial asset” - putting it in the same category as stocks and bonds. That means stricter rules, better investor protection, and a more professional setup.

Under OJK’s rules:

• Exchanges need at least IDR 50 billion ($3.2 million) in capital
• Custodians must hold IDR 25 billion ($1.6 million)
• Token issuers need IDR 10 billion ($640,000)

All platforms must also meet global security standards like ISO/IEC 27001:2022, use distributed ledger tech with 99.5% uptime, and connect to OJK’s real-time monitoring system (SIM IAKD). Failure to comply can cost up to IDR 5 billion ($320,000) per violation.

The Fee Waiver That Changed Everything

Despite the heavy rules, OJK made one surprising move: they eliminated all regulatory fees for crypto businesses in 2025. Previously, exchanges paid between IDR 50 million and IDR 500 million ($3,200-$32,000) per year. Now, it’s free.

This wasn’t charity. It was a calculated investment. Hasan Fawzi from OJK said the waiver was meant to “build a healthy, inclusive, and innovation-driven digital finance ecosystem.” The goal? Attract more players, improve compliance, and make Indonesia a serious player in Asia’s crypto market.

The result? The top three exchanges - Indodax (58% market share), Tokocrypto (27%), and Pintu (15%) - now operate under a clearer, more stable framework. Even international giants like Binance have barely cracked the market, thanks to these strict licensing rules.

The Payment Ban’s Real-World Impact

The split between trading and payments creates real headaches. Businesses that accept crypto for trading can’t use it to pay suppliers or customers. That forces them to convert crypto to rupiah - then back to foreign currency - adding delays and fees.

Alvarez & Marsal’s July 2025 analysis found Indonesian businesses pay 37% more and wait 3.2 extra days for international settlements because they can’t use crypto for cross-border payments. In Thailand or Singapore, companies settle invoices directly in USDT or ETH. In Indonesia? They still use SWIFT and banks.

On the ground, people are finding workarounds. Reddit user u/JakartaToko lost a $12,000 international order because the buyer’s company only paid in USDT. “BI’s payment ban cost me three months of revenue,” they posted in October 2025.

On Kaskus, Indonesia’s biggest forum, thread #cryptoID458921 (with 47,300 views) revealed that 82% of merchants who accept crypto now convert it into gift cards, prepaid credits, or mobile top-ups to avoid detection. It’s not legal, but it’s common.

A survey by Indodax in August 2025 showed 74% of users think the payment ban is “outdated.” And 63% admitted they still use peer-to-peer channels to pay friends or small vendors with crypto - even though they know it’s against the law.

How Taxation Changed in 2025

While payments are banned, taxes got simpler. On August 1, 2025, Minister of Finance Regulation No. 50 of 2025 replaced the old 1% VAT on crypto trades with a flat 0.21% final income tax. That’s a huge drop.

The old system treated crypto like a good you buy at a store. Now, it’s treated like a capital asset - similar to selling stocks. This makes reporting easier and reduces the burden on small traders.

To enforce this, the Directorate General of Taxes (DJP) created a dedicated Crypto Asset Taxation Unit with 147 auditors. They’re now monitoring transactions directly through OJK’s SIM IAKD system, automatically flagging suspicious activity.

Why This Split Is Dangerous

The biggest risk isn’t the ban itself - it’s the contradiction it creates. OJK is building a modern, regulated crypto market. BI is acting like crypto doesn’t exist in daily life. This “regulatory schizophrenia,” as Indodax’s CTO William Sutanto called it, confuses businesses and drives talent away.

According to the Indonesian Blockchain Association (ABI), 27 crypto professionals moved to Singapore or Dubai in the first half of 2025. Robby, ABI’s chairman, warned the House of Representatives: “If our fiscal approach remains rigid and unattractive, we’re going to see brain drain and capital outflow.”

Meanwhile, 68% of surveyed merchants still accept crypto payments informally, according to a 2025 study from Universitas Gadjah Mada. That means consumers have no legal recourse if a merchant disappears after taking their crypto. No chargebacks. No protection. Just risk.

What’s Next? The Digital Rupiah Question

There’s one glimmer of change: Draft Law No. 12/2025 on Digital Rupiah Integration. This proposal could allow crypto payments - but only through a central bank digital currency (CBDC) bridge. In other words, you might one day pay with a digital rupiah that’s backed by blockchain, not Bitcoin.

But Bank Indonesia’s Governor Perry Warjiyo made it clear in October 2025: “Any relaxation of the payment prohibition would require comprehensive assessment of monetary policy transmission mechanisms.” Translation: don’t expect changes soon.

For now, Indonesia’s crypto landscape remains a paradox: the third-largest trading market in Southeast Asia, but one of the strictest when it comes to spending.

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