The provincial government of Bali on Sunday warned tourists against paying for goods and services in cryptocurrencies on the popular Indonesian resort island.

Speaking to local media at the Bali tourism development press conference, Governor Wayan Koster said: “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.

“Strict actions range from deportation, administrative sanctions, criminal penalties, closure of business premises, and other tough sanctions.”

The warning came after an investigation by Indonesia news outlet Kompas showed that a number of businesses in the popular shopping hub of Seminyak, including restaurants, meditation studios and motorbike rental companies, are accepting payment in crypto.

The report also stated that some tourists from Russia face difficulties with cash payment as their home country is subject to economic sanctions due to the war in Ukraine.

Mr Koster reminded tourists that Indonesia’s law prohibits the use of currencies other than the rupiah as a means of payment, with punishments including jail terms of up to a year and a fine of 200 million rupiah (S$18,050).

Businesses that carry out illicit foreign exchange activities may also face jail terms and fines, he added.

At the same press conference, the head of Bank Indonesia’s Bali office, Mr Trisno Nugroho, said crypto assets are allowed as tradeable commodities on futures exchanges, but banned as a form of payment.

Indonesia has always been a magnet for beach-loving tourists and, in recent years, has also attracted many digital nomads, or skilled professionals from different parts of the world who relocate to the island to live and work there remotely.

Tensions between locals and foreigners have risen lately, after a number of mischief-makers among tourists made the news for working illegally, disrespecting religious sites and riding motorcycles while intoxicated with alcohol.