Bank Indonesia to Launch Own Digital Currency Rupiah

  • Indonesia had a large increase in digital transactions during Covid-19 crisis.
  • Bank Indonesia is launching a central bank digital currency.
  • The Bank Indonesia data shows it made more than 570 million digital activities in April.

Indonesia has seen a large increase in digital banking transactions during the Covid-19 crisis. Now, the country will profit from its citizens’ growing interest in mobile banking systems by launching its digital currency.

In line with this, Governor Perry Warjiyo announced the move in a streamed news conference Tuesday. He explains that creating digital currency was one of the Indonesian Government’s top priorities. The digital rupiah will benefit from the growing interest in digital banking platforms. Besides, it has seen a 60% increase in transaction frequency since the start of the pandemic.

Central bank digital currencies (CBDCs), have become a hotter topic since the pandemic. Together, the Government is looking for possible ways to propose a replacement to cash.

In addition, the Bank Indonesia data showed that it made more than 570 million digital activities in April. Highlighting Indonesia’s declining interest in a modern alternative to cash, Warjiyo said:

“Bank Indonesia plans in the future to issue a central bank digital currency, digital rupiah… as a legal digital payment instrument in Indonesia.”

However, the Indonesian Government has not given a timeline yet for the projects, nor has it named what blockchain it would use. Besides, Indonesia could choose to use a private blockchain like China’s digital yuan project or a public blockchain like Ethereum.

On the other hand, Indonesia is currently in the rule of banning cryptos. But, citizens can trade them on exchanges. This law will surely remain in place as the Government promotes its own digital currency for transactions.