Bank Indonesia will soon issue a central bank digital currency (CBDC) or so-called digital Rupiah. Currently, the guidelines are being formulated by BI. Then, is this the same as digital currency in general?
Bank Indonesia is currently formulating guidelines for the digital rupiah use as cash transfers. Later, it can also be used in state securities (SBN) transactions.
BI Deputy Governor Juda Agung explained that three problem formulations need to be considered carefully in designing a CBDC.
Juda, in High-Level Remarks: G20 Tech Spirit Central Bank Digital Currency Midpoint Event, Tuesday (12/7/2022), explained, “We need to explore how we can take advantage of the features of the CBDC program to facilitate efficient cash and securities transfers, and to provide new innovative services to customers.”
The second problem formulation used as a guideline by BI is that the digital rupiah will be designed to be able to target all people in Indonesia, especially in remote and disadvantaged areas, so that CBDC can be implemented properly.
“How can we enable the CBDC (digital Rupiah) to provide an alternative path for people who do not have bank accounts to open transactional accounts and participate in the digital economy,” Juda explained.
Furthermore, BI also wants digital rupiah to be interconnected or interoperability, interconnectivity, and integration (3I). This is done to integrate it into the payment system.
So that later digital rupiah can be implemented properly, not only in urban areas but also in rural areas with intermittent internet connectivity.
“We need to dig deeper into how we can enable connectivity and interoperability with other CBDCs, and with existing domestic payments such as RTGS, clearing systems, ATMs, and debit cards,” said Juda.
“So the best way for the central bank to overcome these three problems and prepare for a CBDC is to explore, experiment, and conduct a CBDC pilot project,” Juda continued.
However, BI did not go into more detail about when the experimental pilot and CBDC pilot project would be carried out.
Furthermore, BI ensures that the presence of the Central Bank Digital Currency (CBDC) aka digital rupiah will not eliminate electronic money that has been widely used by the public.
This was conveyed by the Director of the Payment System Policy Department (DKSP) Ryan Rizaldy in a Media Taklimat in Bali, Tuesday (13/7/2022).
Ryan explained that the digital rupiah will only add transaction options other than currency and electronic money. The hope is that people can transact in various situations.