As the country experiences a boom in digital transactions, Indonesia’s central bank today announced plans for a digital rupiah currency based on blockchain technology.
According to a report, the development of central bank digital currencies (CBDCs), either in the form of retail tokens for use by individual consumers or wholesale tokens for use by banks in the financial system, has been prevalent among central banks worldwide.
The use of cryptocurrencies as a means of payment is currently restricted in Indonesia. However, transactions involving digital assets for investment purposes are permitted on the commodity futures market.
Governor Perry Warjiyo stated:
“Digital rupiah will be implemented in stages, starting from wholesale CBDC for issuance, elimination and transfer between banks.”
In addition to outlining the central bank’s policy direction for 2023, Governor Warjiyo stated that the digital rupiah would highlight Bank Indonesia’s position as the sole authority to create legal tender, including a digital currency.
According to Governor Perry Warjiyo, the next step will be the development of the digital rupiah’s business model for financial operations and the money market, followed by the creation of a retail CBDC for daily use.
According to the report, developing a CBDC in Southeast Asia’s largest economy still requires support from other stakeholders. It also noted that the central bank must conduct trial runs to ensure the project’s success.
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