The central bank of Indonesia is working on issuing a wholesale digital rupee. The new currency is supposed to be the only legal tender currency for digital transactions in the country, while the regulator also wants to ensure that it will be exchangeable across borders.
Digital Rupiah Concept expected by the end of the year
The Indonesian Monetary Authority is moving forward with a plan to issue a digital version of the national fiat for wholesale transactions. It plans to release the concept design for the future digital rupee by the end of 2022, Governor Perry Warjiyo revealed during a briefing on Thursday. Quoted by Bloomberg, he said:
The principle of digital rupiah will be the same as that of paper money which is to be the only legal tender for digital transactions in Indonesia.
Bank Indonesia has investigated the possible launch of its central bank digital currency (CBDC) since last year. Its main intention is to preempt the global adoption of cryptocurrency as a payment method, the report notes.
Monetary authorities in other countries in the region have also considered implementing blockchain technology to improve transfers and settlements, including the central banks of the Philippines and Australia, which are also considering wholesaling. digital currencies.
Australia, Singapore, Malaysia and Republic of South Africa announcement testing cross-border payments with CBDCs last fall. The central banks of these countries have said that the goal of their cooperation is to develop shared platforms for international transactions using different state-issued digital currencies.
Bank Indonesia is currently exploring technology options with counterparts and working on digital rupee cybersecurity features. Once issued, the CBDC will be distributed to large banks and payment service providers, who will in turn sell digital rupees to smaller banking institutions for various retail transactions.
Wellian Wiranto, economist at Oversea-Chinese Banking Corp in Singapore, explained that this will be done to avoid possible disintermediation of banks, especially in times of crisis, or the risk that households choose to do business directly with the central “without risk “. bank rather than commercial banks.
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