Local authorities in Bali warn tourists who attempt to pay in crypto assets that they will be “dealt with firmly.”

At a tourism development press conference on Sunday, Bali Governor Wayan Koster warns foreign tourists who pay with crypto or break other rules may face risk of deportation, criminal penalties, or be dealt with tough sanctions.

“Foreign tourists who behave inappropriately, do activities that are not allowed in their visa permit, use crypto as a means of payment and violate other provisions will be dealt with firmly,” Koster said, according to Channel News Asia.

Under Indonesian law, all transactions carried out in Indonesia must be settled in the local fiat currency – the rupiah.

The law states that anyone using other forms of currency – including tourists – can face up to one year in prison, and a fine that can skyrocket to as much as 200 million rupiah ($13,300).

Indonesia’s currency rules were originally introduced as means to defend the rupiah against widespread use of the US dollar within the country. 

But over the years, crypto has been growing in popularity as a new alternative to the US dollar. Crypto enthusiasts have been drawn to the so-called ‘Silicon Bali’, with Indonesian exchange Tokocrypto even opening up a physical clubhouse for Bali’s crypto community.

Indonesia’s crypto climate

Crypto is still permitted for use in Indonesia –  but not as a form of payment.

There are currently limits on who can carry out foreign exchange business activities within the country, where permission from Bank Indonesia is required to do so.

Bali’s governor reiterated Indonesia’s current laws at the tourism development press conference, emphasising that violations would be “subject to administrative sanctions in the form of written reprimands, obligations to pay fines, and prohibitions from payment transactions.”

The announcement comes as a means to crack down on bad tourist behaviour and conduct in Bali.

Bali, an Indonesian island, is highly dependent on tourism efforts. Having suffered severely from Covid-19 travel restrictions, the local government is dealing with a slew of newfound problems after the return of international visitors.

Before introducing a crypto ban on the island, Koster announced earlier in the year that he plans to ban tourists from using motorbikes as a means of transport around the island, citing a number of traffic violations and crashes. Concerns and frustrations have also risen as of recent, as tourists make light of local traditions by improper conduct, such as posing for photos while naked at holy sites, and working as digital nomads without obtaining the appropriate visas required.