Indonesia’s Central Bank released a white paper about their plans to have a digital currency on Wednesday. The whitepaper release for the digital Rupiah comes as Indonesia has witnessed a massive surge in digital transactions since 2020.
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Bank Indonesia’s (BI) decision is preceded by what several other federal banks worldwide are currently doing: preparing intensely to launch their own central bank digital currencies (CBDC).
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Last week, TechNext reported that the Reserve Bank of India (RBI) plans to conduct the retail pilot of the “digital rupee” after assessing the large-scale usage of its central bank digital currency (CBDC).
More About Indonesia’s CBDC
The forthcoming digital Rupiah will remain subject to the single hegemony of BI to release the legal online tender. BI’s Governor Perry Warjiyo revealed Central Bank’s policy guidelines for the forthcoming year at an event in Jakarta.
“Digital Rupiah will be implemented in stages, starting from wholesale CBDC for issuance, elimination, and transfer between banks,”
Warjiyo attested that the preliminary phases of CBDC are for wholesale and retail transfers and will be integrated later. He divulged that the next step will be to work on the digital Rupiah’s business scheme. The scheme involves monetary operations and the money market.
Nonetheless, Bank Indonesia will finally launch the virtual Rupiah for retail and everyday transactions after the first model has been tested and proven. However, Warjiyo did not indicate the duration planned for the live launch of CBDC, which will enable its retail use across the country.
BI revealed in an official statement on Wednesday that developing CBDC in Southeast Asia’s biggest economy still needs support from other stakeholders, and the central bank has to conduct trial runs.
Indonesia has seen double-digit growth in digital banking transactions in the past few years, with transactions in 2022 set to grow 30% to 53,144 trillion rupiahs ($3.38 trillion), according to BI’s data.
There has also been an exponential rise in cryptocurrency investment during the pandemic.
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