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

Indonesia lets you trade cryptocurrency - but you can’t use it to buy coffee, pay for a ride, or settle an invoice. That’s the strange reality for millions of Indonesians who own Bitcoin, Ethereum, or other digital assets. The country has one of the largest crypto markets in Southeast Asia, with over 14 million active users and $8.1 billion in trading volume in 2024. Yet, if you try to pay someone with USDT or BTC, you’re breaking the law.

Why the Ban Exists

The ban isn’t new. It started in 2016 with Bank Indonesia Regulation No. 18/40/PBI/2016, which said virtual currencies can’t be used as payment. That rule was strengthened in 2017 with Regulation No. 19/12/PBI/2017. Both laws target every kind of payment system operator - exchanges, e-wallets, gateways, and money transfer services - and forbid them from handling crypto transactions.

The reason? Indonesia’s Currency Law says only the rupiah is legal tender. That’s not just a technicality; it’s a core part of how the country controls its money supply and protects its financial system. Bank Indonesia, the central bank, worries that if crypto became a payment method, it could undermine monetary policy, cause currency volatility, and make it harder to track illegal activity.

In November 2025, Bank Indonesia’s Executive Director of Communication, Agusman, 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.” The message hasn’t changed in nearly a decade.

Trading Is Legal - But Only Under OJK

Here’s where it gets confusing. While you can’t use crypto to pay for things, you can buy, sell, and hold it - legally. That’s thanks to the Financial Services Authority, or OJK. On January 10, 2025, oversight of crypto assets officially moved from Bappebti (the commodity regulator) to OJK, which treats crypto as digital financial assets, not commodities.

OJK Regulation No. 27 of 2024 set strict rules for exchanges, custodians, and token issuers. To operate legally, they need:

• Minimum capital of IDR 50 billion ($3.2 million) for exchanges
• IDR 25 billion ($1.6 million) for custodians
• IDR 10 billion ($640,000) for token issuers

They also need to meet global standards for anti-money laundering (AML), counter-terrorism financing (CTF), and cybersecurity - including ISO/IEC 27001:2022 compliance and 99.5% system uptime. These aren’t soft requirements. Fines for violations can hit IDR 5 billion ($320,000).

The OJK also waived all regulatory fees for 2025. Previously, companies paid between IDR 50 million and IDR 500 million ($3,200-$32,000) annually. That move was meant to encourage growth in the trading sector - but it doesn’t change the payment ban.

The Operational Divide

This split between trading and payments creates real headaches for businesses. A company can legally run a crypto exchange under OJK rules, but if a customer tries to pay for a product using Bitcoin, the business can’t accept it - even if they’re licensed by OJK.

This is called “regulatory schizophrenia” by William Sutanto, CTO of Indodax, Indonesia’s biggest exchange. “You’re told to build a compliant trading platform,” he said in a September 2025 interview, “but then you’re told you can’t let people use what you’re trading to pay for anything.”

It forces companies to build two separate systems: one for trading (OJK-compliant) and another for customer payments (ruled by Bank Indonesia). Many small businesses can’t afford that complexity. Some simply avoid crypto altogether.

How People Are Bypassing the Ban

Despite the rules, people are finding ways to use crypto for payments anyway.

A survey by Indodax in August 2025 found that 63% of users had made crypto-based payments informally - through peer-to-peer transfers, gift cards, or prepaid credits. On Kaskus, Indonesia’s biggest forum, a popular thread titled “How to Pay with Crypto Without Getting Caught” has been viewed over 47,000 times. It details how sellers convert crypto into e-wallet credits, mobile top-ups, or even Steam gift cards.

One merchant, u/JakartaToko, lost a $12,000 international order because their client’s company policy required payment in USDT. “BI’s payment ban cost me three months of revenue,” they posted on Reddit in October 2025.

Professor Budi Suharjo from Universitas Gadjah Mada found in his 2025 study that 68% of merchants accept crypto payments unofficially. That means the ban is widely ignored - but it also means consumers have no legal protection. If a crypto payment goes wrong, there’s no recourse.

Taxation Changed - But Not the Ban

In August 2025, the Ministry of Finance made a big move. It scrapped the 1% VAT on crypto transactions and replaced it with a 0.21% final income tax on transaction values. That’s a huge drop - and it signals that the government now treats crypto more like stocks or securities than goods.

The Directorate General of Taxes created a special unit with 147 auditors to monitor crypto activity. They’re linked directly to OJK’s monitoring system (SIM IAKD), so every trade is tracked. This shows the government is serious about collecting taxes - but still not about letting crypto be used as money.

How Indonesia Compares to Neighbors

Indonesia’s approach is stricter than most in Southeast Asia.

- Thailand allows crypto payments in select retail stores under strict licensing.

- Singapore permits licensed payment providers to accept crypto.

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

- Vietnam also bans payments but lacks a strong regulatory body.

Indonesia stands out because it has a clear, well-developed trading framework - but refuses to let that framework extend to payments. That’s closer to the EU’s MiCA rules than its neighbors’. But it also means Indonesian businesses pay 37% more for international settlements and wait 3.2 extra days to process cross-border payments, according to Alvarez & Marsal’s July 2025 analysis.

What’s Next?

There’s talk of change. A draft law, No. 12/2025 on Digital Rupiah Integration, is being reviewed by Indonesia’s House of Representatives. It could create a bridge between the central bank’s digital currency and crypto assets - possibly allowing limited crypto payments through a government-controlled channel.

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 a change soon.

Meanwhile, experts warn of brain drain. Hasan Fawzi from OJK says the fee waiver shows support for innovation. But Robby, head of the Indonesian Blockchain Association, says rigid rules are pushing talent away. In the first half of 2025, 27 crypto professionals left Indonesia for Singapore or Dubai.

Bottom Line

Indonesia’s crypto payment ban isn’t about stopping crypto. It’s about controlling money. The government wants to let people trade digital assets - safely, transparently, and under strict rules. But it won’t let those assets become money.

For users, that means you can invest in crypto. You can even earn from it. But you can’t spend it like cash. And while many find ways around the ban, those workarounds come with risk. No protection. No recourse. No legal safety net.

The real question isn’t whether the ban will last. It’s whether Indonesia can keep its booming crypto market growing while holding onto a rule that feels increasingly out of step with how people actually use money today.