introduce a wholesale digital rupiah.
The new currency is intended to be the sole legal tender for online transactions in the nation, but the regulators also want to make sure that it can be exchanged internationally.
According to Indonesia's monetary authorities, the national fiat will soon be issued digitally for use in wholesale transactions. Governor Perry Warjiyo stated in a briefing on Thursday that "it aims to announce the conceptual design of the next digital rupiah by the end of 2022."
The fundamentals of the digital rupiah will be the same as those of fiat currency, which will be the sole acceptable form of payment for online transactions in Indonesia.
Since last year, Bank Indonesia has been researching the potential rollout of its central bank digital currency (CBDC). According to reports, its major goal is to foresee the widespread use of cryptocurrencies as a form of payment.
Southeast Asia Countries are on the bull run
The central banks of Australia and the Philippines, two additional countries in the region, have been investigating wholesale digital currencies as part of their consideration of deploying blockchain technology to enhance transfers and settlements.
Australia, Malaysia, Singapore, and the Republic of South Africa announced trials of cross-border payments with CBDCs last fall. The aim of their partnership, according to the central banks of these nations, is to create shared platforms for cross-border transactions utilizing various state-issued digital currencies.
In addition to developing the cybersecurity aspects of the digital rupiah, Bank Indonesia is now looking at technological options with partners. As soon as it is released, the CBDC will be distributed to big banks and payment service providers, who would then sell digital rupiahs to smaller financial institutions for a range of retail operations.
According to Wellian Wiranto, an economist in Singapore, this will be done to prevent potential bank disintermediation, particularly during times of crisis, or the risk that households would prefer to bank directly with the "risk-free" central bank rather than with commercial banks.
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