Indonesia Central Bank to issue Digital Currency

Indonesia’s central bank governor Perry Warjiyo has announced that the bank will release the conceptual design of a digital rupiah by the end of this year. Bank Indonesia is on track to issue its own digital currency for banks to use, while considering ways to ensure it would be exchangeable across borders. Warjiyo said the principle of the digital rupiah will be the same as paper money which is to be the only legal currency for digital transactions in Indonesia. Bank Indonesia is currently working on the cybersecurity features of the digital rupiah. Wellian Wiranto, economist at Oversea-Chinese Banking in Singapore, said this is to avoid the classic issue of disintermediation of banks, whereby households would prefer to bank directly with the “risk-free” central bank rather than banks on the street, especially during crisis periods.