Indonesia Crypto Payment Ban Explained: Why Crypto Can't Be Used to Pay for Goods

In Indonesia, you can buy and sell Bitcoin, Ethereum, and other cryptocurrencies legally - but you can't use them to pay for coffee, groceries, or an online order. This contradiction is at the heart of Indonesia’s crypto policy: a clear split between trading and spending. While millions of Indonesians trade crypto daily, using it as money is illegal. Here’s why, how it works, and what it really means for businesses and users.

Why Indonesia Banned Crypto as Payment

The ban isn’t new. It started in 2016 with Bank Indonesia Indonesia’s central bank, responsible for monetary policy and payment system oversight Regulation No. 18/40/PBI/2016. It was reinforced in 2017 with Regulation No. 19/12/PBI/2017. Both rules explicitly forbid any payment system operator - from e-wallets to payment gateways - from processing transactions using virtual currencies like Bitcoin or USDT.

The reason? Indonesia’s Currency Law Establishes the rupiah as the only legal tender in Indonesia says only the rupiah can be used as money. That’s not just a technicality - it’s a legal foundation. Bank Indonesia argues that allowing crypto payments could destabilize the financial system, create money laundering risks, and confuse consumers about what counts as real money. In November 2025, Agusman, Executive Director of Communication at Bank Indonesia, made it clear: "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."

Trading Is Fine - But Only Under OJK

While Bank Indonesia blocks crypto as payment, a different agency handles trading. On January 10, 2025, oversight of crypto assets officially moved from Bappebti Commodity Futures Trading Regulatory Agency, Indonesia’s former crypto regulator to the Financial Services Authority (OJK) Indonesia’s financial regulator overseeing banks, insurance, and now digital assets. This wasn’t just a name change - it was a major shift.

Under OJK Regulation No. 27 of 2024, crypto assets were reclassified as digital financial assets A regulatory category for crypto that aligns it with securities, not commodities. This means they’re treated more like stocks or bonds than gambling chips. The move gave crypto platforms more legitimacy - and stricter rules.

Now, every crypto exchange, custodian, and token issuer must:

• Hold minimum capital: IDR 50 billion ($3.2M) for exchanges, IDR 25 billion ($1.6M) for custodians, IDR 10 billion ($640K) for issuers
• Use distributed ledger technology with 99.5% uptime
• Implement real-time transaction monitoring and multi-factor authentication
• Comply with FATF anti-money laundering standards
• Connect to OJK’s Digital Financial Innovation Monitoring System (SIM IAKD) OJK’s real-time regulatory monitoring platform for digital asset platforms

These requirements are serious. Smaller platforms with under IDR 500 million ($32K) in development budgets struggle to keep up. But the OJK also made it easier to operate: they waived all regulatory fees for 2025. Previously, companies paid between IDR 50 million and IDR 500 million ($3,200-$32,000) annually. Now, they pay nothing. That’s a big win for the industry - even if they still can’t let customers pay with crypto.

How Businesses Are Bypassing the Ban

The ban doesn’t stop people from using crypto to pay - it just makes it illegal. Many merchants and users have found ways around it.

On Reddit’s r/IndonesiaCrypto, users share stories like this one from October 2025: "I lost a $12,000 international order because my customer couldn’t pay via USDT as required by their company policy - BI’s payment ban cost me 3 months of revenue." A survey by Indodax Indonesia’s largest crypto exchange, handling 83% of domestic trading volume found that 74% of 5,000 users think the payment ban is "outdated." And 63% admit they’ve used peer-to-peer channels to make crypto payments anyway.

One common workaround? Converting crypto into gift cards. A popular Kaskus thread (viewed over 47,000 times) revealed that 82% of sellers who accept crypto now turn it into prepaid mobile credits, Steam wallets, or Amazon gift cards. The buyer gets what they need. The seller gets paid. And technically, no one used crypto as payment - they used a gift card.

This creates a dangerous gray zone. Consumers have no legal protection. If a seller disappears after selling a gift card bought with crypto, there’s no recourse. No regulator steps in. No law protects you.

How Indonesia Compares to Neighbors

Most Southeast Asian countries are more flexible.

- Thailand allows crypto payments for select merchants under strict licensing.

- Singapore lets licensed payment providers process crypto transactions.

- Malaysia is testing pilot programs to relax its own ban.

Indonesia is the outlier. It’s more like Vietnam - which also bans crypto payments but allows trading. But Vietnam lacks a strong regulatory body. Indonesia has OJK, with detailed rules, capital requirements, and monitoring systems. That’s why experts say Indonesia’s framework is closer to the EU’s MiCA than its neighbors.

But here’s the catch: while Indonesia has one of the most advanced crypto trading systems in the region, its payment ban makes it less competitive. According to Alvarez & Marsal’s July 2025 analysis, Indonesian businesses face 37% higher transaction costs and 3.2 extra business days to settle international payments because they can’t use crypto. They’re stuck with slow, expensive bank wires.

Tax Changes Make Trading More Attractive

On August 1, 2025, Indonesia changed how crypto is taxed. Before, every trade was subject to a 1% VAT. Now, under Minister of Finance Regulation No. 50 of 2025 (PMK 50) New tax rule that reclassifies crypto as a digital financial asset, the tax is just 0.21% - and it’s a final income tax. That means no more complicated reporting.

The Direktorat Jenderal Pajak (DJP) Indonesia’s tax authority, now using OJK data to monitor crypto transactions created a special unit with 147 auditors to track trades. They’re connected directly to OJK’s SIM IAKD system, so every transaction is visible. This isn’t about stopping crypto - it’s about controlling it.

The message is clear: trade all you want. Just pay your taxes. But don’t use it to buy anything.

The Real Cost: Brain Drain and Lost Opportunities

The split between trading and payment rules is causing real damage.

Robby, Chairman of the Indonesian Blockchain Association (ABI), warned in August 2025: "If our fiscal approach remains rigid and unattractive, we’re going to see brain drain and capital outflow." He pointed out that 27 crypto professionals moved to Singapore or Dubai in the first half of 2025 alone.

William Sutanto, CTO of Indodax, called the situation "operational schizophrenia." OJK is building a world-class trading system. Bank Indonesia is blocking the most practical use case: spending.

The numbers show the impact. Indonesia had 14.3 million crypto users in December 2024 - third in Southeast Asia. But its digital payment efficiency is only 63%, compared to Thailand’s 82% and Singapore’s 91%. The World Bank says this gap exists because Indonesia can’t use blockchain for fast, low-cost settlements.

What’s Next? A Digital Rupiah Bridge?

There’s one possible path forward. The Indonesian House of Representatives is reviewing Draft Law No. 12/2025 on Digital Rupiah Integration. This could allow crypto to be used indirectly - not as payment, but as a bridge to the central bank’s own digital currency.

Bank Indonesia Governor Perry Warjiyo said in October 2025 that any change would require "a comprehensive assessment of monetary policy transmission mechanisms." Translation: don’t hold your breath. The payment ban isn’t going away soon.

What This Means for You

If you’re a trader: Indonesia’s rules are clear, strict, and surprisingly supportive. OJK’s fee waiver and tax cut make it one of the best places in Asia to trade crypto.

If you’re a merchant: Don’t accept crypto as payment. You risk fines, legal trouble, and no consumer protection. Use gift cards or bank transfers instead.

If you’re a consumer: Be careful. Peer-to-peer crypto payments are common - but illegal. If something goes wrong, you’re on your own.

The system works - but only if you accept the rules. Crypto is an investment here. Not money.