The Bank of Indonesia is one of the last global central banks to announce state plans for digital currency amid a major spike in digital payments in the country.
Governor Perry Warjiyo said on Tuesday that Indonesia’s central bank plans to launch a digital rupee currency as a legal payment instrument in Indonesia, Reuters reports.
The official noted that the rupee has so far been the only legally accepted payment currency in the country and that BI will consider regulating a digital rupee in the same way it regulates cash and card transactions.
According to Warjiyo, BI is currently studying the potential benefits of a digital rupee, including its impact on monetary policy and payment systems, and assessing the readiness of financial infrastructure. The bank is also evaluating potential technological options to create a central bank digital currency, he noted. Speaking at a continuous press conference, the official did not elaborate on an exact timeline for a digital rupiah development.
As of this writing, BI has apparently not released an official statement regarding its CBDC plans. According to a notice posted on an official bank website, BI is about to decide on the issuance of a digital rupee in the near future, the necessary preparations being completed. âBI is still focused on digital transformation as part of the Indonesian payment systems 2025 master plan,â the statement noted.
According to the report, Indonesia’s entry into the global CBDC race follows a surge in digital banking, with the frequency of digital transactions increasing by more than 60% on an annual basis. Digital payments are one of the country’s top political priorities after Indonesia experienced strong growth in online transactions during the COVID-19 pandemic.
The latest news follows the Indonesian financial authorities’ announcement of potential tax plans for crypto-generated capital gains last week. Previously, the Indonesian Futures Trade Regulatory Agency was also considering levying a tax on all cryptocurrency transactions made on domestic cryptocurrency exchanges.
Indonesia is known for its mixed approach to regulating crypto as a country to put a general ban on cryptocurrency payments in 2017 despite maintaining the legality of crypto trading.