Indonesian financial watchdog Otoritas Jasa Keuangan (OJK) has warned financial institutions in the country not to offer or facilitate the sale of crypto assets.
On Tuesday, The official OJK Instagram account posted a warning against the growing number of crypto Ponzi schemes and the risks of crypto investments due to market volatility. The official publication also quoted President Wimboh Santoso, who said that financial institutions are strictly prohibited from offering cryptocurrency sales services in any form. The official post said:
“OJK has strictly prohibited financial services institutions from using, trading and/or facilitating trading in crypto assets.”
The current warning against cryptocurrency investments and a ban on cryptocurrency trading services for financial institutions comes on the heels of several calls to ban the use of cryptocurrencies by major Islamic non-governmental organizations (NGOs) in the country.. As Cointelegraph previously reported, a total of three Islamic organizations have issued a fatwa against the use of cryptocurrencies by Muslims, deeming them haram.
In October 2021, the major Islamic organization Nahdlatul Ulama deemed cryptocurrencies haram due to their alleged speculative nature. A month later, the Indonesian Ulema Council declared that haram cryptocurrencies are a transactional tool. However, he noted that crypto assets can be used as an investment tool if they comply with Sharia principles. Muhammadiyah became the third Islamic organization in Indonesia to issue a fatwa against the use of cryptocurrencies as a payment and investment tool.
Indonesia over the years has grown to become one of the leading crypto economies in Asia. The total crypto transaction reached 859 trillion rupees ($59.83 billion) in 2021, up from 60 trillion rupees ($4.18 billion) in 2020.
Crypto assets are regulated as tradable commodities in Indonesia, governed by the Ministry of Commerce and the Commodity Futures Trading Regulatory Agency.. The ministry is currently working on creating an independent marketplace for digital assets called the Digital Futures Exchange, which is expected to launch in the first quarter. However, cryptocurrencies as a form of payment tool are illegal in the country.
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