Central bank plans to make CBDC 'only legal digital tender' in Indonesia, says gov

Bank of Indonesia governor Perry Warjiyo has announced developments in its plans to launch a central bank digital currency, or CBDC, for “various digital economic and financial transactions.”

In a Dec. 5 speech at the central bank’s annual meeting, Warjiyo said the bank planned to release details on the conceptual design of a digital rupiah — a currency the equivalent of the country’s fiat — and open the matter to public comment. According to the governor, the Bank of Indonesia intended for the digital rupiah to be “integrated, interconnected, and interoperable” with other country’s CBDCs following discussions with central bank officials.

The CBDC initiative, called Project Garuda, will start with the launch of a wholesale digital rupiah for “use cases of issuance, redemption, and interbank fund transfer” followed by “monetary operations and financial market development.” The project’s white paper stated the third phase will deal with end-to-end transactions between wholesale and retail digital rupiah users.

“Collaboration and synergy on national and international level is critical to the development of Digital Rupiah,” said Warjiyo.

Related: Indonesia’s cryptocurrency community in 2022: An overview

Indonesia imposed a blanket ban on crypto payments starting in 2017, while trading in digital assets largely remained legal in the country as regulated under the Commodity Futures Trading Regulatory Agency. Warjiyo first announced plans for Indonesia to introduce a CBDC in May 2021 but did not provide a specific timeline on the digital currency’s release.