BI Formulates Digital Currency

TEMPO.CO, Jakarta - Bank Indonesia is formulating the creation of a digital currency or Central Bank Digital Currency (CBDC) if needed later. The rupiah CBDC is a representation of digital money as a symbol of sovereign currency, issued by the central bank and is part of its monetary obligations.

Posting to its official Instagram account @bank_indonesia on Sunday, May 30, the central bank said the implementation will be "adjusted to economic conditions and the context of digitization being pushed by Bank Indonesia."

As a digital currency, the CBDC will be issued and controlled by the central bank. That way, BI can increase or decrease the supply in accordance with Indonesia's economic goals.

As of now, BI has conducted a CBDC Rupiah study to discover the potential and benefits of digital currency. The studies carried out include those of design, technology and risk mitigation.

To date, the central bank only acknowledges the rupiah as the only currency that is valid for both cash and non-cash transactions.

Meanwhile, Center of Reform on Economics' (CORE) economist Rendy Manilet said that BI must map out potential risks before releasing the CBDC, "because I believe the public is still largely unfamiliar with digital currencies," he said when contacted last weekend.

He suggested that BI strengthens coordination with relevant stakeholders such as the Communication and Information Technology Ministry, as well as telecommunications operators, to ensure equal distribution of digital technology infrastructure.

BI, Yusuf said, also needs to coordinate with the financial industry such as the Financial Services Authority (OJK) for supervision, and the Finance Ministry for the application of digital money.

Read: Bank Indonesia Maintains Interest Rate at 3.5%

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