The central bank of Indonesia plans to issue a digital rupiah wholesale. While the new currency will be the sole legal tender for digital transactions within the country, the regulator wants it to be interchangeable with other currencies.
The Indonesian monetary authority is moving forward with a project to issue an electronic version of its national fiat for wholesale transactions. The future digital rupiah will be released by the end 2022, Governor Perry Warjiyo said in a briefing Thursday. He elaborated as Bloomberg quoted him:
The principle of digital rupeh will be the exact same as that of paper money, which is the legal currency for digital transactions within Indonesia.
Since last year, Bank Indonesia has been researching the launch of its central bank’s digital currency ( CBDC ) since. The report states that its main goal is to be ahead of global adoption of cryptocurrency payment methods.
Other countries in the region are also looking at blockchain technology to improve transfer and settlements. This includes the central banks of Australia and the Philippines, who are also considering wholesale digital currencies.
Australia, Singapore and Malaysia announced trials of cross border payments with CBDCs last autumn. These central banks stated that their goal was to create a shared platform for international transactions using digital currencies from different states.
Bank Indonesia is currently collaborating with other banks to explore technology options and work on cybersecurity features for the digital rupeh. The CBDC will be distributed once it is issued to large banks and other payment service providers. They will then sell digital rupiahs at smaller banks for various retail transactions.
Wellian Wiranto is an economist at Oversea Chinese Banking Corp in Singapore. This will be done in order to avoid possible disintermediation, particularly in times of crisis or the risk that households might choose to bank directly through the “risk-free central bank” rather than with commercial banks.