Indonesia Central Bank All-Set to Launch Digital Rupiah

Indonesia’s Central Bank on Wednesday revealed a planned white paper for a digital rupiah currency that will utilize blockchain technology as the country experiences a spike in digital transactions since 2020.

Its been a year since Bank Indonesia (BI) tried to expose the potential of introducing its own digital currency (CBDC). However, the action taken by Bank Indonesia is in line up with the development of so-called central bank digital currencies among other central banks around the globe. 

Indonesia’s Trail Run For Digital Currency

According to BI data, digital banking transactions in Indonesia have grown by double digits over the last few years, and in 2022 they are expected to increase by 30% to 53,144 trillion rupiahs ($3.38 trillion).

However, Governor Perry Warjiyo stated at a conference where he also unveiled the central bank’s policy agenda for 2023 that the launch of the digital rupiah will emphasize Bank Indonesia’s position as the sole authority to issue legal tender, including a digital currency.

Also, Governor Perry Warjiyo stated that;

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

At the moment, Indonesia prohibits the use of cryptocurrencies as a form of payment but it does permit the transactions of digital assets for investments on the futures market for commodities.

Further, in a statement on Wednesday, BI stated that other stakeholders must continue to support conducting trial runs and the development of CBDC in Southeast Asia’s largest economy. Moreover, the Reserve Bank of India (RBI) announced on Tuesday that it would start testing its retail central bank digital currency.