Indonesian government considers creating a national Bitcoin reserve
Indonesia is studying the benefits of a reserve in Bitcoin, the world's leading cryptocurrency, as a way to strengthen its economy
Last week, the Bitcoin Indonesia group held a meeting with the country’s vice-presidential office to discuss the proposal for a Bitcoin reserve to help strengthen the economy.
The strategic reserve in the market’s leading cryptocurrency is a bold idea, complemented by opportunities in mining and financial education that will drive adoption of the digital asset.
Abundant hydroelectric resources favor Bitcoin mining
During the meeting, various advantages the Asian country has in the context of cryptocurrencies were highlighted, such as its “abundant hydroelectric and geothermal resources that could be used to power Bitcoin mining operations.”
On the other hand, the Bitcoin Indonesia group presented government officials with “long-term price projections, such as the one by Michael Saylor, who predicts that Bitcoin could reach $13 million by 2045 in a base case scenario, and up to $49 million in a bull case.”
Such a decision must be carefully considered, considering that Indonesia is the world’s 16th largest economy, with a GDP of around $1.4 trillion and a population of over 280 million. A Bitcoin reserve “could serve as a diversification tool in an increasingly uncertain global macroeconomic environment.”
Regulatory contradictions
However, it is worth remembering that the country maintains a restrictive stance regarding cryptocurrency payments. Specifically, it has banned its use as a means of payment since 2017, “and recently the Ministry of Finance has doubled the tax burden on traders and miners.” In addition, the Income Tax on cryptocurrency sales on local exchanges increased from 0.1 % to 0.21 %, and the fee for foreign exchanges increased from 0.2 % to 1 %. Mining companies, meanwhile, face a VAT that increased from 1.1 % to 2.2 %.
M.Pino
Source: coinwatcher.com
(Main reference image source: Jannis Lucas en Unsplash)
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