BI: Digital Rupiah Won't Raise Amount of Money in Circulation

3 October 2022 12:58 WIB

Illustration or Logo of Bank Indonesia. REUTERS/Iqro Rinaldi/File Photo

TEMPO.CO, Jakarta - Bank Indonesia (BI) ensured that the issuance of a digital rupiah or central bank digital currency or CDBC would not increase the amount of money in circulation in Indonesia. The digital rupiah's issuance will be adjusted to the amount of money already circulating.

The central bank's Payment System Policy Department director, Fitria Irmi Triswati, said that when it comes to monetary operations,--in this case issuing money—BI will calculate the liquidity. "When digital rupiah arrives, it will coexist [with conventional banknotes and coins]," she said in Ubud, Bali as quoted Monday, October 3.

She also ensured that the digital rupiah is not like crypto assets in general because it will comply with the three pillars of money issuance, (1) serving as a legal digital payment instrument; (2) supporting the implementation of Bank Indonesia's tasks in the monetary, macro-prudential, and payment systems fields; and (3) supporting the development of the financial system and the integration of the digital financial economy.

Fitria said that although digital money utilizes blockchain technology, its issuance will remain under the central bank's supervision to ensure it is safe and functioning properly.

"It will be in the form of a digital currency with all of its impacts calculated beforehand, so that the risks are mitigated optimally," Fitria said.

Bank Indonesia has begun to select which banks and payment system providers have the required capacity to distribute digital rupiah.

BI Governor Perry Warjiyo said that the distribution process would use the Distributed Ledger Technology (DLT) - Blockchain to ensure the security of digital rupiah for its owners.

ARRIJAL RACHMAN

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