Foreign tourists entering Bali have been warned not to use cryptocurrencies as a method of payment or risk severe government sanctions.

The Indonesian island of Bali said tourists are not allowed to pay with cryptocurrencies, warning that violators "will be dealt with firmly".

The government is seeking to curb the influx of foreign tourists as a way of dealing with problematic foreigners who violate local laws.

Offending foreign tourists will face severe sanctions

Bali will take action against foreign tourists who use cryptocurrencies to pay, Governor Wayan Koster said at a tourism development press conference on Sunday, May 28. Koster said violators could face deportation, criminal penalties and other severe sanctions.

“Foreign tourists who misbehave, engage in activities not permitted by their visa permit, use cryptocurrencies as a means of payment, and violate other regulations will be dealt with firmly.”

The governor of Bali emphasized that the Indonesian rupiah is the only legal currency allowed as a means of payment and said that using any other currency is a violation of Indonesian law, and violators will face a year in prison and a fine of up to 200 million Indonesian rupiah ($13,000).

Coster's warning comes amid reports that the governor-general plans to impose a quota system to limit the number of foreign tourists entering the province and curb the influx of foreigners who violate local regulations. Bali's tourism industry peaked in 2019 but was hit hard during the COVID-19 pandemic in 2020, which led to the island shutting down international flights and thus severely restricting foreign tourists from entering the country.

While Bali has since reopened its borders, the province says there has been an increase in unruly behavior from tourists, which appears to be causing headaches for locals and the government.

Cryptocurrencies are allowed, but not for payments

Bank Indonesia Bali governor Trisno Nugroho said that while cryptocurrencies are acceptable in the province, their use for payments is not. As CryptoPotato previously reported, Bank Indonesia warned financial institutions not to facilitate cryptocurrency payments.

Coster also said that foreign exchange business activities can only be carried out with a license from Indonesia's central bank, adding that operating without a license could result in a prison sentence of up to five years and a fine of up to 22 billion rupees ($1.4 million).

"Violations will be subject to administrative penalties in the form of written reprimands, payment of fines and prohibition of payment transactions."