TEMPO.CO, Nusa Dua - Governor of Bank Indonesia Perry Warjiyo encouraged ASEAN countries to promote central bank digital currency in line with the rapid development of cryptocurrency.

“Private digital assets eventually need to refer to a sovereign digital currency unit of account,” said Perry at the high-level seminar in Nusa Dua, Bali, on Tuesday, March 28.

Indonesia’s central bank is now developing a digital rupiah. BI issued a Phase I Consultative Paper entitled "Garuda Project: Wholesale Rupiah Digital Cash Ledger" on January 31, 2023, as a follow-up to the publication of the Garuda Project White Paper on November 30, 2022.

After the publication of the document, Perry said his institution would start developing a design for the digital rupiah project under the Garuda Project. Thus, the digital currency will be the only sovereign digital currency that can be used as a reference for units of calculation by private digital assets.

Digital currency and cryptocurrency are among the topics of discussion at the first meeting of ASEAN Central Bank Governors and Finance Ministers in Bali on March 28-31, 2023.

BI Deputy Governor Dody Budi Waluyo said digital currencies were in the spotlight because of their risks to the economy, including one issued by central banks.

“We will discuss the issue of risk and implications [of crypto assets], especially their impact on the macroeconomy and finance. We all believe that there is a risk,” said Dody, adding that one of the risks is related to the capital flows. “Faster volatility, bigger volatility.”

With high volatility, the BI Deputy Governor explained, the use of digital currency for trading can increase the inflation rate if it cannot be controlled. Therefore, crypto asset transactions and central bank digital currency issuance must be considered thoroughly.

CAESAR AKBAR

Editor's Choice: The Ups and Downs of Cryptocurrency

Click here to get the latest news updates from Tempo on Google News