According to reports from Antara News, Doni Primanto Joewono, Deputy Governor of Bank Indonesia (BI) said that he expects the Central Bank Digital Currency (CBDC), which is still being developed, to increase capital market growth by aiding payment access and financial inclusion. “It will help encourage business opportunities and (financial) policy transmission,” he explained at the “2022 Indonesia Digital Financial Economics Festival (FEKDI): Advancing Digital Economy and Finance” in Badung, Bali recently.
He explained there would be opportunities for implementing CBDC in Indonesia, but there will also be risks and because of this BI is inviting input from key players in Indonesia’s financial industry in developing CBDC.
BI is currently working on developing the CBDC, which will be called the “Digital Rupiah,” to provide the public financial sovereignty, support the central bank’s mandate regarding the digital economy sector, as well as increase financial innovation and efficiency.
In the near future, BI will bring out a white paper and a consulted paper before issuing the CBDC.
Joewono said that the development of the CBDC must reduce financial risks and balance the digital currency design with applicable policies and because of this he suggested “the issuance of CBDC should not harm monetary and financial stability. It should support the fulfilment of the central bank’s mandate and provide benefits to (finance) commodities.”
Based on BI’s review of digital currencies issued by central banks in other countries, there are three important principles that need to be considered while designing a CBDC for Indonesia, Joewono noted.
- The design of a high-level CBDC must not disrupt monetary and financial stability in domestic and cross-border use.
- The design of a CBDC must be integrated, interconnected, and harmonious with the existing payment systems.
- The establishment of a technology platform that can enable the issuance and circulation of the digital currency.
Source: Antara News