Indonesia’s central bank has revealed that it plans to develop and issue a central bank digital currency (CBDC).
Bank Indonesia, Indonesia’s central bank, has revealed it intends to develop and issue a CBDC. Governor Perry Warjiyo revealed this during a press conference yesterday, stating that the apex bank would issue its digital rupiah.
The Bank of Indonesia governor said the move was prompted by a digital transaction boom during the pandemic. “BI plans in the future to issue a central bank digital currency, digital rupiah…as a legal digital payment instrument in Indonesia,” he added. However, he didn’t provide a timeline for the launch of the CBDC.
The apex bank is now looking at how the CBDC will help it meet its monetary policy and payment systems objectives. Warjiyo said they would analyse these metrics by assessing the readiness of the financial infrastructure. He added that the bank is currently considering its options on the technology to use for the CBDC.
Warjiyo pointed out that the rupiah is the only legally accepted currency in the country. The Bank of Indonesia plans to regulate the digital rupiah the same way it regulates card-based transactions and banknotes.
Indonesia is the largest economy in Southeast Asia. The country banned the use of cryptocurrencies for transactions but allowed its citizens to trade them. Indonesia now joins other Asian countries, including Hong Kong, China, Japan, Thailand and South Korea, in developing a CBDC.
Countries in various parts of the world are developing central bank digital currencies to ensure their financial systems keep up with the modern times. The apex banks believe that CBDCs would help eliminate the threats from cryptocurrencies and stablecoins and also hasten international and domestic transactions.