Electronic Money Will Grow Significantly in Indonesia

Electronic Money (E-Money)

Digitalization has penetrated the financial sector in Indonesia. With the convenience it offers, the electronic money will continue to grow and become increasingly popular with the public. This was conveyed directly by the Governor of Bank Indonesia (BI).

Governor of Bank Indonesia (BI) Perry Warjiyo predicts that electronic money transactions will continue to grow significantly in the future.

This is in line with digital economic and financial growth in 2023 and 2024, where he estimates that e-commerce transactions can reach IDR 572 trillion in 2023 and IDR 689 trillion in 2024.

Perry also revealed that digital banking is also projected to reach more than IDR 67,000 trillion in 2023 and IDR 87,000 trillion in 2024.

“Electronic money is IDR 508 trillion (in 2023) and IDR 640 trillion (in 2024),” Perry said at the 2022 Bank Indonesia Annual Meeting (PTBI), quoted Friday (2/11/2022).

Perry said BI’s policy mix in 2023 will continue to be directed as part of the national policy mix to strengthen resilience, recovery, and revival of the Indonesian economy amid global economic conditions that will slow down and the risk of recession in some countries.

“Bank Indonesia’s monetary policy in 2023 will continue to be focused on maintaining stability (pro-stability),” he said.

Meanwhile, four other BI policies, namely macroprudential policy, payment system policy, financial market deepening policy, and green and inclusive financial economy policy will continue to be directed for and as part of joint efforts to accelerate national economic recovery (pro-growth).

He also stressed that the digitalization of the payment system based on the 2024 Indonesian Payment System Blueprint (BSPI) would continue to be encouraged to accelerate digital economic and financial integration.

“Collaboration on payment systems between countries, as well as stages for the development of Digital Rupiah as well as the ‘white paper’ which was also launched at PTBI 2022,” said Perry.

Furthermore, Perry emphasized that BI is the sole authority in issuing digital currency (sovereignty digital rupiah).

The presence of the digital rupiah is also expected to strengthen BI’s role on the international stage and accelerate the integration of the digital financial economy nationally.

“Digital rupiah will be implemented in stages, starting from the wholesale CBDC (Central Bank Digital Currency) for issuance, destruction, and transfers between banks,” said Perry.

This white paper outlines the formulation of CBDC for Indonesia by considering the principles of benefits and risks. The issuance of this WP is the first step of the “Garuda Project”, which is a project that underlies various exploration initiatives for various architectural design options for Digital Rupiah.