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Bank Indonesia Prepares to Issue Digital Rupiah as Legal Tender for Digital Payments – Finance Bitcoin News
The Central Bank of Indonesia is working on issuing a wholesale digital rupiah. The new currency is intended to be the only legal means of payment for digital transactions in the country, while the regulator also wants to ensure that it can be exchanged across national borders.
Digital Rupiah concept is expected by the end of the year
Indonesia’s monetary authority is moving ahead with a project to issue a digital version of the national fiat for wholesale transactions. It plans to release the conceptual design of the future digital rupiah by the end of 2022, Governor Perry Warjiyo revealed in a briefing on Thursday. Quoted by Bloomberg, he elaborated:
The principle of digital rupiah will be the same as paper money which will be the only legal currency for digital transactions in Indonesia.
Bank Indonesia has been studying the possible launch of its central bank digital currency (CBDC) since last year. The main intention is to get ahead of the global use of cryptocurrency as a payment method, the report notes.
The monetary authorities of other nations in the region have also looked at implementing blockchain technology to improve transfers and settlements, including the central banks of the Philippines and Australia, which are also considering wholesaling digital currencies.
Australia, Singapore, Malaysia and the Republic of South Africa announced attempts at cross-border payments with CBDCs last fall. The central banks of these countries said the goal of their cooperation was to develop shared platforms for international transactions using different government-issued digital currencies.
Bank Indonesia is currently exploring technology options with counterparties and working on the cyber security features of the digital rupiah. Once issued, the CBDC will be distributed to major banks and payment service providers, who will in turn sell digital rupiahs to smaller banking institutions for various retail transactions.
Wellian Wiranto, economist at Oversea-Chinese Banking Corp in Singapore, explained that this will be done to avoid potential disintermediation by banks, especially in times of crisis, or the risk that households will choose to bank directly with the “risk-free” exchange. bank instead of commercial banks.
Do you expect Bank Indonesia to issue its wholesale digital currency by the end of the year? Tell us in the comments section below.
Image credit: Shutterstock, Pixabay, Wiki Commons, Mang Kelin
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