National Bank of Indonesia Prepares Digital Rupiah


    Bank Indonesia (BI) will reportedly launch Digital Rupiah in the near future. The plan will be affiliated with BI’s digital economy concept, namely the Central Bank Digital Currency (CBDC).

    This is a response to crypto euphoria in the community. But unfortunately, the digital rupiah is still in the study process by BI.

    This news was conveyed directly by Juda Agung, as the candidate for Deputy Governor of Bank Indonesia during a fit and proper test with Commission XI DPR-RI last December 1st.

    Juda stated that the implementation of the CDBC will be carried out in stages.“The CBDC implementation can be done in stages. A few percent, 20% of the money in circulation, does not fully replace it, it’s still coins and digital notes,” he said.

    According to him, gradual implementation is the wisest step to take. This is an anticipatory step if unexpected things happen, such as system problems and even power failures.

    It means that paper money and coins that have been in circulation all this time are still will be used. “If everything is digital, it will be a big risk there must still be coins,” he added.

    This plan is based on the rapid pace of digital transactions in Indonesia. Based on Bank Indonesia’s 2021 annual report, electronic money transactions touched the figure of Rp. 40,000 trillion.

    The figure is up 41.2% year-on-year. In fact, it will grow again by 16.3% or equivalent to Rp. 337 trillion in 2022.
    [Also read: Here are Tips for Safe Digital Transactions During a Pandemic]

    Digital Money Spreading Options

    In response to the plan, BI stated that they are currently reviewing options for distributing digital rupiah. There are two alternative options that they are now preparing, namely directly (one-tier) or indirectly (two tier).

    “There are two approaches that are being explored by BI, namely direct or one-tier and indirect or two-tier,” explained Juda Agung, still on the same occasion.

    In a direct approach, Bank Indonesia will provide digital rupiah tokens to all levels of society, from households to corporations.
    While the indirect approach, BI will implement two stages, among others, it will circulate digital rupiah through banks, then the public can buy it through the bank.

    DPR (Legislative office) Highlights CDBC Plan

    On the other hand, another member of Commission XI of the DPR-RI, Muhidin Mohamad Said, stated that BI must show its concrete role as the central bank in dealing with digital asset trading transactions.
    Especially now that digital currency assets, cryptocurrencies are emerging.

    “Crypto’s development is extraordinary and the public’s interest is unstoppable. If anticipation is not quickly carried out, it is feared that illegal problems will arise that have been happening and are detrimental to the community,” he said.

    Source : financial, cnbc