The Central Bank of Indonesia Plans to Make CBDC Indonesia’s “Only Legal Digital Tender,” The Government Says.

The governor of the Bank of Indonesia, Perry Warjiyo, recently made an announcement regarding the latest developments in the organization’s plans to launch a central bank digital currency, also known as CBDC, for “various digital economic and financial transactions.”

In a speech given on the 5th of December at the annual meeting of the central bank, Warjiyo stated that the bank intended to release details on the conceptual design of a digital rupiah — a currency that would be the equivalent of the country’s fiat — and open the matter to public comment. He also stated that the bank would release the information. Following discussions with officials from other central banks, the governor of the Bank of Indonesia stated that the Bank of Indonesia intended for the digital rupiah to be “integrated, interconnected, and interoperable” with the CBDCs of other countries.

Following the launch of a wholesale digital rupiah for “use cases of issuance, redemption, and interbank fund transfer,” the CBDC initiative, which is called Project Garuda, will move on to “monetary operations and financial market development.” According to the white paper for this project, the third phase will focus on transactions that go from beginning to end between wholesale and retail users of digital rupiah.

According to Warjiyo, the development of the Digital Rupiah requires significant amounts of cooperation and synergy on both the national and international levels.

The use of cryptocurrencies for payments has been completely outlawed in Indonesia as of the year 2017, despite the fact that the buying and selling of cryptocurrencies is still allowed in the country and is regulated by the Commodity Futures Trading Regulatory Agency. Warjiyo initially announced plans for Indonesia to introduce a CBDC in May 2021; however, he did not provide a specific timeline on the release of the digital currency at the time of his announcement.