Indonesia to launch digital rupiah as demand for online payments increase

May 26, 2021

Indonesia’s central bank is assessing which platform it will use, Governor Perry Warjiyo said on Tuesday.

The country is seeing a digital payment boom during the pandemic, he said, according to a Reuters report.

Indonesia has put advancing digital payments as one of its main policy priorities, after seeing a strong rise in online transactions during the coronavirus pandemic.

Transaction frequency in digital banking platforms jumped 60.3% on an annual basis to more than 570 million times in April, while value rose 46% to reach 3,114.1 trillion rupiah ($217.4 billion), Bank Indonesia (BI) data showed.

“BI plans in the future to issue a central bank digital currency, digital rupiah…as a legal digital payment instrument in Indonesia,” the governor has told a streamed news conference, without providing a timeline.

BI is now examining how the digital rupiah will help it meet its objectives on monetary policy and payment systems, including by assessing the readiness of the financial infrastructure, Warjiyo said.

“We’re also, of course, considering our options on the technology that we will use,” he said.

The governor said the rupiah was the only legally accepted currency for payment, and BI will regulate the digital rupiah the same way it regulates banknotes and card-based transactions.

Indonesia bans the use of cryptocurrencies in transactions, but cryptocurrency trading is allowed.

Other Asian central banks, such as Hong Kong, Thailand and South Korea, are working towards launching CBDC pilot programmes. China, which has one of the most advanced projects globally, began city-wide testing of digital yuan last year.

Copyright © 2021 Thomson Reuters

Image PxHere

Share
Leave a Reply

Your email address will not be published. Required fields are marked *