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Bali is a destination renowned for its stunning surf beaches, flowery Hindu rituals and Eat, Pray, Love-inspired getaways, but if local numismatists have their way, the Indonesian island could soon be known for something else: Bitcoin.
Indonesia first made headlines in the bitcoin blogosphere when an anonymous buyer from Texas purchased a Bali villa on luxury Bitcoin marketplace BitPremier for around 800 bitcoins (approximately $500,000), the largest Bitcoin transaction to date. Then in May, a group of Bitcoin enthusiasts announced an ambitious plan to turn Bali into a “Bitcoin island” (or an island where bitcoin is the preferred currency) by the year’s end.
Spearheaded by the co-founders of Bitcoin Indonesia, the nation’s largest bitcoin exchange, the group came one step closer to its goal with the launch this month of a Bali-based booking agency called Bitcoin Tour. The new travel agency claims clients can receive discounts of up to 75 percent if they exchange their digital currency for hotel reservations at “almost all star-rated hotels” in Indonesia. Travelers can also exchange bitcoins for train and plane tickets on all major Indonesian carriers.
Bitcoin Tour is part of the broader Bitislands project, which boasts a center for Bitcoin exchange along the main drag of Kuta, Bali’s answer to the Jersey Shore. Bitislands has a team of volunteers who spread information about the cryptocurrency to businesses throughout the tourist centers of Legian, Seminyak and Ubud.
Project Director Oscar Darmawan says the primary goal is to increase the number of tourists to Bali, a 2,175-square-mile island that already draws in excess of 3 million annual visitors.
“Tourists will benefit from Bitcoin because it’s easier and safer for them than bringing cash,” Darmawan says. “Sometimes people lose their wallet and phone when traveling because of many reasons – forgetting them, dropping them, pocket thieves – but with Bitcoin, you can easily backup your digital wallet and restore it. Indonesian companies will benefit from Bitcoin because tourists can bring their own money without any limit, therefore they can spend more.”
Darmawan believes using bitcoin lets travelers avoid predatory exchange rates and feel more secure on island. It could also benefit the local currency, he adds, because Indonesia would become less reliant on the U.S. dollar.
But is Bitcoin really catching on with everyday tourists? That remains to be seen.
Darmawan admits that most people who visited the office of Bitcoin Tour in its first two weeks in operation used local currency to pay for their airline tickets and hotel reservations. Moreover, just 30 businesses on the island accept Bitcoin at the point of transaction.
Bali now boasts more establishments that accept Bitcoin than neighboring Java (including Jakarta), despite having a population that’s 35-times smaller. One of the newest additions to the Bitcoin bandwagon is Hubud, a co-working space in the expat hub of Ubud.
“Our decision was quite simple: We have a very nomadic community that values having a transnational currency to be able to pay with for almost no transaction cost,” cofounder Steve Munroe explains.
Hubud began accepting bitcoin in July and has had 20 transactions to date for memberships, travel excursions and other services. The space hosts weekly Bitcoin meetups, two of its members just launched Coin Academy, and another is working on a bitcoin payment processing app. Munroe says Hubud is now exploring the options of a bitcoin ATM and a bitcoin exchange desk.
If communities like Hubud and advocates like the Bitislands group have their way, Bali may soon exemplify how a tourist destination can benefit from becoming an early adaptor to a disruptive technology.
Yet Bali is hardly alone.
More than 60,000 online retailers now accept bitcoins worldwide, including travel sites like CheapAir, Travel Keys and, most recently, Expedia. Michael Gulmann, Expedia’s global vice-president, announced in June that the company would trial the digital currency on its U.S. site for hotel purchases, noting that it was in a unique position “to solve travel planning and booking for our customers and partners alike by adopting the latest payment technologies.”