The Bank of Indonesia has announced plans to issue a central bank digital currency (CBDC). The central bank has joined the list of other major central banks that are working on their national digital currencies. Bank of Indonesia’s governor Perry Warjiyo recently announced the plans to launch a digital rupiah amid the surging uptake of digital payment solutions in the country.
Rupiah will remain the only legal currency in Indonesia.
The governor noted that the rupiah would remain the only legal currency in the country. The governor said the bank would regulate the proposed digital rupiah in the same way; across both card and cash transactions. The central bank has now turned its focus to studying the benefits of a digital currency and the knock-on effect on payment systems and the wider monetary system while addressing issues around the financial infrastructure’s readiness. Central banks across countries are currently working on their national digital currencies in some capacity.
Digital banking transactions in Indonesia increased by 60%.
Digital banking transactions in Indonesia have increased by over 60% year on year, with the digital currency being issued against a backdrop of growing interest in digital currencies. The Bank of Indonesia has yet to release a formal statement confirming its plans but has noted that preparations are underway for the eventual release of a digital rupiah: “BI is currently still focusing on digital transformation as part of Indonesia payment systems blueprint 2025.” The news follows the last week’s announcement from the Indonesian financial regulator that plans were underway to tax capital gains from digital currency, alongside plans for a digital currency transaction tax put forward by the Commodity Futures Trade Regulatory Agency.