Indonesia Central Bank to Introduce Digital Currency

TheIndonesia.co - Bank Indonesia (BI) is currently in the process of selecting the most reliable banking and payment system players for the task of distributing digital currency or digital rupiah. At the 16th Bulletin of Monetary Economics and Banking (BMEB) International Conference here on Thursday, BI Governor Perry Warjiyo said that the issuance of digital rupiah as a central bank digital currency (CBDC) and the state’s legal tender has been mandated by the Constitution and the BI’s regulation.

Globally, two options have been implemented by various countries for distributing digital currency. The first one involves the central bank solely focusing on distributing digital currency systemically using the wholesale scheme. Meanwhile, the second option involves giving the mandate to banking and payments system companies to distribute the CBDC through the retail scheme.

The BI Governor said that the bank has decided to distribute the digital rupiah through a retail scheme, meaning the digital currency will be disbursed by BI only to large banks and payments system companies. 

Meanwhile, other central banks around the world have tended to choose both schemes, he noted.

"The distribution platform (of the digital rupiah) will use the Distributed Ledger Technic (DLT) blockchain, thus the designated banks will have two accounts, a digital account and a standard account,” he informed.

Hence, only selected banks or payments system companies will receive digital rupiah from BI through their respective DLT blockchain accounts, he added.

Currently, BI is striving to develop the ecosystem for supporting the use of the digital rupiah, including preparing to issue the digital currency, building a digital rupiah platform, as well as selecting distributors.

Thus, in the future, the younger generation will have two accounts at banks and payments system companies—regular accounts and digital accounts, Warjiyo said. "We will implement it. Later, the millennials can do a (purchase through the) metaverse (platform) from their digital account using digital rupiah," he added.