Indonesia: BI Eyeing to Establish Central Bank Digital Currency

• Feb 01, 2018

TEMPO.CO, Jakarta – Bank Indonesia (BI) is currently studying the possibility of issuing a central bank digital currency (CBDC).

“The study is still in its early stages, we will study it even deeper as other central banks in the world are doing,” said Onny Widjanarko, Head of payment system policy department on Wednesday, January 31.

Because of the complex elements regarding its indicator and implication, the study will take some time and is expected to be completely understood before the year 2020 before it is decided whether they would issue it or not.

According to Onny, the study includes calculating the cost and benefit of having a CBDC and comparing its application in countries that have already introduced a CBDC. “We will not do it if the research isn’t accurate enough. The UK has yet to complete their study since 2016, while Ecuador is brave enough [to trial test their CBDC],” said Onny.

Onny asserted that other than preparing its infrastructure and security measures, the essential elements of the study is related to the effects or implications of the CBDC towards the stability of the monetary system, financial system, payment system, and consumer’s protection.

Bank Indonesia will also have to harmonize the CBDC with preexisting regulations in the form of currency laws.

Furthermore, Onny denies that the plan to establish a CBDC is a direct reaction to the current popularity of virtual currencies such as Bitcoin. “CBDC is not volatile like Bitcoin, it is underlined, has a legal tender, issued by regulators, and is regulated by the Law,” said Onny.

Source: https://en.tempo.co/read/news/2018/02/01/056915355/BI-Eyeing-to-Establish-Central-Bank-Digital-Currency