Indonesian White paper on planned digital currency is out

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  • Plans for a digital rupiah currency were revealed by Indonesia’s central bank on Wednesday.
  • The digital rupiah emphasizes Bank Indonesia’s (BI) status as the sole agency authorized to issue legal tender.
  • BI however stated that the central bank must carry out trial runs.

As the country experiences a boom in digital transactions, Indonesia’s central bank on Wednesday presented plans for a digital rupiah currency. This is intended to leverage blockchain technology in the country.

The action is in line with the development of so-called central bank digital currencies (CBDCs) by other central banks across the globe. This is either in the form of retail tokens for use by consumers directly or wholesale tokens for use by banks in the financial system.

Governor Perry Warjiyo talked at a gathering where he also unveiled the central bank’s policy direction for 2023. He stated that the introduction of the digital rupiah will emphasize Bank Indonesia’s (BI) position as the exclusive authority to issue legal tender, including a digital currency.

“Digital rupiah will be implemented in stages, starting from wholesale CBDC for issuance, elimination, and transfer between banks,” he said.

Currently, Indonesia forbids the usage of cryptocurrency for payment. On the other hand, it permits the trading of digital assets for investments in the futures market for commodities.

Without providing a date, Warijyo stated that the next step will be to create the business model for the digital rupiah’s monetary operations and money market. Ultimately, a retail CBDC will be created for everyday usage.

In other reports of the statement on Wednesday, BI stated that the central bank must carry out trial runs. It also states that other stakeholders must continue to promote the development of CBDC in Southeast Asia’s largest economy.

According to BI statistics, digital banking transactions in Indonesia have grown by double digits over the last several years. In 2022 however, they are expected to increase by 30% to 53,144 trillion Rupiah ($3.38 trillion).

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