Indonesia to issue a national digital currency (CBDC)

The Bank of Indonesia plans to issue a national digital currency (CBDC) to speed up transactions, Reuters reports.

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According to regulator chief Perry Warjiyo, the digital rupiah will gain status as legal tender. Launch timelines were not specified.

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At present, the central bank is evaluating the technology underpinning the CBDC, as well as the readiness of the financial infrastructure.

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According to the publication, the catalyst for the decision was the rise in popularity of cashless payments amid the COVID-19 pandemic.

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According to the central bank, in April the number of cashless transactions rose 60% year on year to 570 million, and their value grew 46% to 3.1 trillion rupiah (~$217.5 billion).

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The use of cryptocurrencies as a payment method is prohibited in Indonesia, while trading them does not contravene the laws.

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Earlier, Indonesian authorities announced the introduction of a profits tax on cryptocurrency transactions.

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The Bank of Indonesia first announced plans to issue a digital rupiah back in 2018.

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