The Central Bank of Indonesia announced a new stage in the launch of its own digital currency

The Central Bank of Indonesia unveiled the concept of introducing its own government stablecoin amid a growing number of digital payments.

Indonesian Central Bank Governor Perry Warjiyo said that the regulator is monitoring the results of studies of the potential of state stablecoins issued by other central banks. According to the statistics of the Central Bank of Indonesia, in 2022 the volume of digital banking transactions in the country grew by 30%, to 53,144 trillion Indonesian rupiah ($3.38 trillion). Therefore, the regulator sees the need to develop a digital Indonesian rupiah. This would reduce the interest of local residents in cryptocurrencies, the governor of the central bank believes.

Varjiyo said that only the Central Bank of Indonesia can be the only issuer of the digital rupee, and this state stablecoin will become legal tender on a par with the national currency. First, a wholesale digital rupee will be issued for money transfers between banks and financial institutions. The next phase will be developing a retail CBDC that people can use for daily payments and transfers.

However, Varjiyo did not specify the approximate date from which the digital rupee will become available to users. The official noted that the central bank needs the support of all stakeholders who can help the regulator conduct testing for the effective implementation of the pilot project.

Last year, the Central Bank of Indonesia said that the digital currencies of central banks are much more reliable in comparison with cryptocurrencies, which pose great risks to the financial system.