Indonesia central bank launches white paper on planned digital currency

FILE PHOTO: Bank Indonesia's logo is seen at Bank Indonesia headquarters in Jakarta, Indonesia, September 2, 2020. REUTERS/Ajeng Dinar Ulfiana/File Photo

JAKARTA (Reuters) - Indonesia's central bank on Wednesday unveiled plans for a digital rupiah currency that will use blockchain technology, as the country sees a boom in digital transactions.

The move follows that of many central banks around the world that are developing so-called central bank digital currencies (CBDCs), either in the form of retail tokens to be used directly by consumers or wholesale tokens to be used by banks within the financial system.

The digital rupiah will underline Bank Indonesia's (BI) role as the sole authority to issue legal tender, including a digital currency, Governor Perry Warjiyo said at an event where he also laid out the central bank's policy guidance for 2023.

Indonesia currently bans the use of cryptocurrencies as a means of payment, but allows transactions of the digital assets in the commodity futures market for investment purposes.

"Digital rupiah will be implemented in stages, starting from wholesale CBDC for issuance, elimination and transfer between banks," he said.

The next stage will be to develop the digital rupiah's business model for monetary operations and money market, and eventually a retail CBDC will be developed for everyday use, Warijyo said, without elaborating on a timeline.

BI said in a 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 rupiah ($3.38 trillion), according to BI's data.

There has also been an exponential rise in cryptocurrency investment during the pandemic.

($1 = 15,730.0000 rupiah)

(Reporting by Stefanno Sulaiman; Editing by Gayatri Suroyo and Kanupriya Kapoor)

Article type: free
User access status:
Subscribe now to our Premium Plan for an ad-free and unlimited reading experience!


Next In Tech News

U.S. judge orders fresh review for Thacker Pass lithium project
Meta fails to stop work conditions case in Kenya
Musk’s Twitter expected to face the strictest EU content rules
Microsoft investigates Outlook outage as users face issues
Apple’s latest iPhones sell at US$100-plus discounts in China
Nintendo promises 10% pay hike even as it trims profit outlook
DCG sells shares in Grayscale as it seeks to raise funds - FT
Cryptoverse: Is bitcoin out of the woods? Consider the options
Alibaba-backed Asian group Daraz cuts workforce 11%
China's Baidu says developing AI chatbot

Others Also Read