Indonesian authorities, including the central bank, are looking into the use of bitcoin as a currency in various retail establishments across the holiday island of Bali.

It was October 2017 when Bank Indonesia, the country’s central bank, issued a public notice outlawing bitcoin as a payment instrument. At the time, central bank governor Agus Martowardojo issued a threat to bitcoin adopters who defied the authority’s orders, stating “those who use it will be dealt with.”

In spite of the warning, bitcoin continued to find acceptance among a large number of businesses in Bali, a popular tourist destination island in Indonesia. After learning of the activity through social media, Bank Indonesia (BI) Bali office chief Causa Iman Karana revealed a joint operation among central bank officials and police who went ‘undercover’ to investigate bitcoin-friendly businesses, near the end of 2017.

As reported by The Jakarta Post, the team found 44 businesses – including car rentals, hotels, jewelry stores and travel agencies – welcoming the use of the world’s first cryptocurrency.

“We found out from some postings on social media that Bali appeared to have become a haven for bitcoin transactions,” Karana told media.

He went on to add:

The next step is we will ban them as mandated by the law. We ask them not to use it anymore. Along with the Directorate of Special Crime Investigation unit, we will enforce the rule that all transactions in Indonesia must use rupiah [the country’s fiat currency].

The crackdown is certain to sting bitcoin adopters in Bali, an island that is Indonesia’s primary tourism hub with a significant expatriate community who use the cryptocurrency over others.

While bitcoin is currently banned as a payment method, Indonesian authorities could increase their scrutiny even further by drafting regulation that would enact a complete ban of all cryptocurrency activity – trading and transactions – sometime in 2018. The BI’s latest warning on bitcoin, deeming it a ‘bubble’, was issued this month as a notice urging citizens not to “sell, buy or trade” cryptocurrencies, seen as a threat to “the stability of the financial system.”

Bali image from Shutterstock.