Indonesia’s Central Bank Unveils Plans for a CBDC
- According to local data, digital banking transactions in Indonesia have grown by double digits over the last few years. Interestingly, they are expected to increase by 30% at the end of 2022.
- Crypto assets are classified as commodities in Indonesia but are not a form of payment.
- Cryptocurrencies in Indonesia are regulated by the nation’s Commodity Futures Trading Regulatory Agency (Bappebti) under the Ministry of Trade.
Indonesia is witnessing a boom in digital transactions, and on Wednesday, the country’s central bank unveiled plans to launch a digital currency that will be powered by blockchain technology. Central Bank Digital Currency (CBDC) is fast becoming a trend in the world, with more than 80% of central banks said to be exploring it.
Governor Perry Warjiyo, while announcing the central bank’s policy agenda for 2023, said that the introduction of the digital rupiah will emphasize Bank Indonesia’s (BI) position as the sole sovereign power to issue legal tender, including a digital currency.
While cryptocurrencies are popular in Asia, Indonesia outlaws them as a form of payment but permits the trading of digital assets for investments on the commodity futures market. According to Perry, “Digital rupiah will be implemented in stages, starting from wholesale CBDC for issuance, elimination and transfer between banks.”
Perry also noted that the BI plans to develop a business model for monetary operations and the money market for digital currency. The bank also intends to roll out retail CBDC for regular use. However, there is no timeline for when that would happen.
Compared to 9 million stock traders, Indonesia has more than 14 million cryptocurrency users. As of March, the number of crypto users in the Asian country was 300% higher than it was in 2020. The growth of digital assets in the country could be traced to its largely unbanked population.