Jakarta – Bank Indonesia (BI) has officially announced its plans to venture into the exploration of a Central Bank Digital Currency (CBDC) in 2024, initiating full-scale trials in collaboration with prominent commercial banks. The central bank’s CBDC project, known as the digital rupiah, will primarily target wholesale interbank settlements utilizing blockchain technology. Previous studies on the digital rupiah, including a successful proof-of-concept completed in 2022, have laid the foundation for this year’s pilot.
BI Governor Perry Warjiyo outlined the objectives of the upcoming pilot, emphasizing the examination of technological and regulatory architecture crucial for the successful deployment of the digital rupiah. The proof-of-concept issuance in 2022 has set the stage for designing the technology and infrastructure required for the CBDC.
The central bank’s decision to focus on wholesale offerings stems from insights obtained during a public consultation involving key industry stakeholders. The results led to the abandonment of retail CBDC hopes, with Warjiyo underscoring the importance of a wholesale approach to maintain the “rupiah’s sovereignty in the digital era.”
To execute the CBDC pilot effectively, BI has enlisted support from commercial banks and technical partners. The trial will extend beyond local interbank payments, exploring cross-border settlements, tokenization, and use cases in foreign exchange transactions and the metaverse.
BI’s pursuit of interoperability with CBDCs from other jurisdictions hints at a phased rollout. The initial launch will involve a digital rupiah for monetary operations and the money market, followed by the potential introduction of a retail CBDC.
BI Governor Warjiyo indicated broader ambitions for the digital rupiah, stating, “We will also push for the downstream project of the government and several other policies,” reflecting the central bank’s strategic alignment with the country’s broader economic goals.
Simultaneously, Indonesian regulators are tightening regulations on digital currencies, considering classifying them as securities. The Ministry of Trade has mandated stricter rules for digital asset exchanges, including requirements for two-thirds of exchange directors to be domiciled in Indonesia. These regulatory changes aim to prevent asset commingling and foster a more structured digital currency environment. Indonesia is also exploring the establishment of a national digital currency exchange to bring uniformity to the industry instead of an outright ban on digital assets.
