The Bank of Indonesia will publish the concept of a national digital currency (CBDC) by the end of 2022. Bloomberg reports, citing Perry Warjio, head of the central bank.
The Bank of Indonesia is preparing to issue a digital rupiah for interbank and international transfers. It is currently working on the cybersecurity of the instrument.
“The digital rupiah will be on par with cash and will become the sole legal tender for digital transactions in Indonesia,” said Warjio.
The central bank intends to roll out the CBDC among major banks and payments-service providers, who will collaborate with smaller financial institutions for retail transactions.
This will help avoid the classic problem of disintermediation, when households would prefer to conduct transactions directly through a “risk-free” central bank rather than through ordinary banks, especially in crisis periods,
said Wellian Wiranto, an economist at OCBC.
The Bank of Indonesia first announced plans to issue a CBDC in 2018. In May 2021, the regulator confirmed its intention, without specifying launch timelines.
In November, the department described the deployment of the digital rupiah as one of the ways to combat cryptocurrencies in the country. The central bank described the CBDC as a “more reliable alternative”.
In 2021, Indonesian financial institutions were prohibited from using Bitcoin and other digital assets as a means of payment.
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