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 online order. That’s the strange reality of crypto in Indonesia in 2025. While millions of Indonesians trade Bitcoin and Ethereum through licensed exchanges, using crypto as payment is strictly illegal. This isn’t a loophole or a gray area. It’s a hard rule, backed by two powerful institutions: Bank Indonesia and the Financial Services Authority (OJK).

Why Was the Crypto Payment Ban Put in Place?

The ban started in 2016 with Bank Indonesia Regulation No. 18/40/PBI/2016. It was reinforced in 2017 with Regulation No. 19/12/PBI/2017. Both rules say the same thing: virtual currencies like Bitcoin, Ethereum, and USDT are not legal tender. Only the rupiah holds that status under Indonesia’s Currency Law.

Bank Indonesia’s reasoning is simple: crypto doesn’t have a central authority. It can’t be controlled, monitored, or stabilized like a national currency. If people started paying for everything with Bitcoin, it could destabilize the financial system. Imagine a sudden drop in Bitcoin’s value causing mass defaults on everyday purchases. Or worse - criminals using untraceable crypto to move money without oversight.

In a public statement on November 13, 2025, Agusman, Executive Director of Bank Indonesia’s Communication Department, made it crystal 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 Rules

Here’s where it gets confusing: you can legally trade crypto in Indonesia - but only if you use an OJK-licensed platform. On January 10, 2025, oversight shifted from Bappebti (the commodities regulator) to OJK, the financial watchdog. This wasn’t just a paperwork change. It was a full reclassification.

Crypto assets are now called "digital financial assets," not commodities. That means they’re treated more like stocks or bonds than gold or soybeans. OJK Regulation No. 27 of 2024 set strict new rules:

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

All platforms must follow international anti-money laundering standards (FATF), use secure systems meeting ISO/IEC 27001:2022, and maintain 99.5% uptime. They also have to connect directly to OJK’s monitoring system, SIM IAKD, which tracks every transaction in real time.

And here’s a surprise: OJK waived all regulatory fees for 2025. Before, exchanges paid up to IDR 500 million ($32,000) a year in fees. Now, they pay nothing. That’s a huge incentive for platforms to get compliant - and a sign that the government wants crypto trading to grow, just not as a payment tool.

How Do People Still Pay With Crypto? (And Why It’s Risky)

Despite the ban, people find ways. A survey by Indodax in August 2025 found that 63% of users have made crypto-based payments anyway - usually through peer-to-peer (P2P) deals or by converting crypto to gift cards.

On Kaskus, Indonesia’s biggest forum, a popular thread (#cryptoID458921) shows how 82% of sellers avoid the ban by turning crypto into prepaid credits. Someone pays in Bitcoin? The seller gives them a Tokopedia gift card instead. It’s not legal, but it’s common.

Reddit users complain about lost business. One merchant, u/JakartaToko, said they lost a $12,000 international order because the buyer’s company required USDT payments. "BI’s payment ban cost me three months of revenue," they posted in October 2025.

The problem? These workarounds offer zero consumer protection. If a gift card seller disappears, or a P2P trade goes bad, there’s no recourse. No regulator, no refund, no legal backup. That’s why OJK and Bank Indonesia keep warning the public: "Don’t use crypto to pay. It’s risky."

How Indonesia Compares to Neighboring Countries

Indonesia isn’t alone - but it’s one of the strictest.

- Thailand allows crypto payments for licensed merchants under specific conditions. Some stores accept Bitcoin for coffee.

- Singapore permits crypto payments through licensed payment providers. You can use crypto to pay for Uber rides or buy groceries at select supermarkets.

- Malaysia bans crypto payments but is testing pilot programs to relax rules.

- Vietnam also bans payments, but lacks a strong regulator like OJK. Enforcement is patchy.

Indonesia’s approach is more like the EU’s MiCA framework - strict on payments, but serious about regulating trading. That’s why experts say Indonesia’s system is more advanced than its neighbors, even if it’s less flexible.

The Hidden Cost: Slower Business and Higher Fees

The ban isn’t just annoying - it’s expensive. A July 2025 report by Alvarez & Marsal found that Indonesian businesses pay 37% more and wait 3.2 extra days to complete international payments because they can’t use crypto for settlements. They’re stuck with slow, costly bank wires and intermediaries.

That hurts small exporters and freelancers. A designer in Bandung who gets paid in USDT from a client in the U.S. has to cash out through an exchange, wait for rupiah to arrive, then transfer via bank - a process that can take 48 hours. In Thailand or Singapore, they could settle instantly.

World Bank data shows Indonesia’s digital payment system runs at just 63% efficiency - compared to 82% in Thailand and 91% in Singapore. The reason? No blockchain-based settlement options.

What Changed in 2025? Taxation Got Simpler

While payments stayed banned, taxes got easier. On August 1, 2025, the Ministry of Finance rolled out PMK 50, which replaced the 1% VAT on crypto trades with a flat 0.21% final income tax.

That’s a big drop. Before, every trade - even small ones - triggered a 1% tax. Now, only profits are taxed at a low rate. Plus, the government created a dedicated Crypto Asset Taxation Unit with 147 auditors who monitor trades automatically through OJK’s system.

This change made trading more attractive - and more transparent. Companies are now reporting crypto holdings in their financial statements. Of Indonesia’s top 100 public companies, 87% listed crypto assets in Q2 2025, up from 52% in late 2024.

Who’s Winning? Who’s Losing?

The market is growing fast. Indonesia had 14.3 million active crypto users by the end of 2024 - fifth largest in the world by user count. Trading volume hit IDR 127.5 trillion ($8.1 billion) last year.

The top three exchanges dominate: Indodax (58%), Tokocrypto (27%), and Pintu (15%). International players like Binance barely register - they can’t get licensed under Indonesia’s strict rules.

But there’s a brain drain. According to the Indonesian Blockchain Association, 27 crypto professionals moved to Singapore or Dubai in the first half of 2025. "If our fiscal approach remains rigid and unattractive, we’re going to see brain drain and capital outflow," warned Robby, chairman of ABI, in August 2025.

Meanwhile, compliance officers with crypto expertise now earn 37% more than traditional finance auditors. Companies are scrambling to hire people who understand OJK’s system - but there aren’t enough trained professionals yet.

What’s Next? The Digital Rupiah Could Change Everything

There’s a glimmer of change on the horizon. Indonesia’s House of Representatives is reviewing Draft Law No. 12/2025 on Digital Rupiah Integration. This could allow crypto to interact with the central bank’s own digital currency - the digital rupiah.

Think of it like a bridge: your USDT doesn’t pay for coffee directly. But it gets converted into digital rupiah, which does. That would keep the payment ban intact while letting crypto play a role in the financial system.

Bank Indonesia’s governor, Perry Warjiyo, said in October 2025 that any change would need "comprehensive assessment of monetary policy transmission mechanisms." Translation: no quick fixes.

For now, the split remains: trade freely, pay illegally. And that’s the reality for Indonesian crypto users in 2025.