Project Garuda: Indonesia’s Digital Rupiah

Bank Indonesia (BI) have released details on Project Garuda; an initiative to explore the optimal design for an Indonesian CBDC, or Central Bank Digital Currency they’re calling the Digital Rupiah, which they believe will safeguard the sovereignty of Indonesia’s currency in the digital era.

The project reinforces BI’s preceding initiatives in advancing the digital transformation of the country, particularly with the mutual objective of accomplishing an end-to-end integration of economy and finance, which has been promoted through the Indonesian Payment System Blueprint 2025 (BSPI 2025) and Blueprint for Money Market Development 2025 (BPPU 2025).​

Digital Rupiah White P​aper

​BI go on to explain that as a first step, a white paper concerning the development of the Digital Rupiah was released on 30 November 2022 and is available here.

The White Paper looks at the design of the Digital Rupiah under the umbrella of Project Garuda as well as the importance of initiating public communication regarding the development plan of the Digital Rupiah.

This White Paper explains:

  • Digital Rupiah end-to-end integrated design configuration,
  • Digital Rupiah design features that are aiming to stimulate new business models,
  • Digital Rupiah technology architecture, and
  • Regulatory and policy supports for the implementation of the Digital Rupiah design.

Considering its extensive implications, this national-scale initiative requires synergistic efforts in its formulation and implementation, say BI.

Similarly, the synergy with the international central banking community and international organizations is essential to ensure the alignment of the Digital Rupiah design with various interoperability initiatives for cross-border transactions.

According to reporting from Detik Finance, BI Governor Perry Warjiyo said there will be several stages for the development of the Digital Rupiah;

  • wholesale CBDC (W-CBDC) for the business model of issuing, destroying, and interbank transfers with the Digital Rupiah;
  • the model will be expanded into the development of monetary operations and money market business models.
  • end-to-end W-CBDC integration with retail CBDC (R-CBDC).

Perry explained that “we are in the process of processing all the designs, features, security that only the Digital Rupiah has to become the official legal tender in this country. And we will use it as a reference for storing the value of digital assets. Whether used in digital banking, e-commerce, or even in the metaverse with digital rupiah.”

Detik Finance report that BI’s white paper on the Garuda Project says that the issuance of the Digital Rupiah is to provide digital payment instruments without the risk of using central bank money, reduce the risks of privately issued digital currencies, expand the scope and efficiency of payment systems (including cross-border transactions,) and expand and accelerate financial inclusion.

Apart from the Digital Rupiah, there is also the objective of providing new monetary policy instruments and facilitating the distribution of fiscal subsidies, say Detik Finance.

To access the white paper, click here. 

In their attempt to help socialize the idea of a Digital Rupiah, BI have also posted some frequently asked questions (and answers.)

What is a CBDC?

CBDCs (Central Bank Digital Currency) are a new form of central bank money, which is the liability of the central bank, and is denominated in the national official currency, serving as a medium of exchange, unit of account, or store of value.

The framework of the Digit​​al Rupiah: Why, What, and How?

The idea to develop the Digital Rupiah as Indonesia’s CBDC is driven by three key factors:

  1. The status of Bank Indonesia as the sole institution with the authority to issue the Indonesian currency.
  2. The prolonged effort of Bank Indonesia to strengthen its role in the international stage.
  3. The necessity to accelerate integration of the national digital economy and finance. 

Based on these key drivers, the Digital Rupiah design will be formulated to achieve three objectives:

  1. The Digital Rupiah as digital legal tender for the Republic of Indonesia, complementing banknotes and coins.
  2. The Digital Rupiah as a core instrument for Bank Indonesia in carrying out its mandate in the digital era.
  3. The Digital Rupiah as a primary element in supporting the development of national financial systems and the integration of national digital economy and finance.

What are the stages of Digital Rupiah Development?

Bank Indonesia say there will be 3 (three) phases of Digital Rupiah development; an immediate phase, an intermediate phase, and a final phase.

Each phase will start with public consultations (consultative papers and focus group discussions), followed by technological experimentation (proof of concept, prototyping, and piloting/ sandboxing), and conclude with policy stance review.

Disclaimer: Bank Indonesia believes that the Digital Rupiah has the potential to preserve the sovereignty of the Indonesian Rupiah in the digital era, including supporting an integrated digital economy and finance as well as creating the opportunities for more equitable and sustainable financial inclusion. Nonetheless, most central banks are still mindful before taking a decision to issue a CBDC for the public. There are stages of further experimentations and discussions required. There is no one-size-fits-all solution in the development of CBDC as each country has its own unique characteristics and specific policy contexts.

Sources: Bank Indonesia, Detik Finance

Latest Article
More Than 1 Million Tourist Visits in April
According to reporting from Antara News, Indonesia’s Ministry of Tourism and Creative Economy announced...
The Plan for Flying Taxis in Nusantara
Indonesia’s future capital city, Ibu Kota Nusantara (IKN), is progressing towards becoming a smart and...
Govt Allocates More Subsidies for Electric Motorcycles
According to reporting from Antara News, Dadan Kusdian, Indonesia’s Secretary General of the Ministry...
Netherlands Consider Easier Visas for Indonesians
Citing Antara News, Tempo is reporting that Indonesia and the Netherlands discussed strengthening consular...
Ministry to Implement KRIS at 3,060 Hospitals by 2025
Indonesia’s Health Ministry is targeting to get more than 3,000 national hospitals to implement...

Andrzej Barski

Director of Seven Stones Indonesia

Andrzej is Co-owner/ Founder and Director of Seven Stones Indonesia. He was born in the UK to Polish parents and has been living in Indonesia for more than 33-years. He is a skilled writer, trainer and marketer with a deep understanding of Indonesia and its many cultures after spending many years travelling across the archipelago from North Sumatra to Irian Jaya.

His experience covers Marketing, Branding, Advertising, Publishing, Real Estate and Training for 5-Star Hotels and Resorts in Bali and Jakarta, which has given him a passion for the customer experience. He’s a published author and a regular contributor to local and regional publications. His interests include conservation, eco-conscious initiatives, spirituality and motorcycles. Andrzej speaks English and Indonesian.

Terje H. Nilsen

Director of Seven Stones Indonesia

Terje is from Norway and has been living in Indonesia for over 20-years. He first came to Indonesia as a child and after earning his degree in Business Administration from the University of Agder in Norway, he moved to Indonesia in 1993, where he has worked in leading positions in education and the fitness/ wellness industries all over Indonesia including Jakarta, Banjarmasin, Medan and Bali.

He was Co-owner and CEO of the Paradise Property Group for 10-years and led the company to great success. He is now Co-owner/ Founder and Director of Seven Stones Indonesia offering market entry services for foreign investors, legal advice, sourcing of investments and in particular real estate investments. He has a soft spot for eco-friendly and socially sustainable projects and investments, while his personal business strengths are in property law, tourism trends, macroeconomics, Indonesian government and regulations. His personal interests are in sport, adventure, history and spiritual experiences.

Terje’s leadership, drive and knowledge are recognised across many industries and his unrivalled network of high level contacts in government and business spans the globe. He believes you do good and do well but always in that order. Terje speaks English, Indonesian and Norwegian.

Contact Our Consultants

[wpforms id=”43785″]

Ridwan Jasin Zachrie

CFO of Seven Stones Indonesia, Jakarta

Ridwan is one of Indonesia’s top executives with a long and illustrious career in the financial world. He holds several professional certifications including being a Certified Business Valuer (CBV) issued by the Australian Academy of Finance and Management; Broker-Dealer Representative (WPPE); and The Directorship Certification for Directors and Commissioners, issued by the Indonesian Institute of Commissioners and Directors.

His experience includes being the Managing Director at one of the top investment banking groups in the region, the Recapital Group, the CFO at State-owned enterprises in fishery industry and the CEO at Tanri Abeng & Son Holding. He’s also been an Independent Commissioner in several Financial Service companies and on the Audit and Risk Committee at Bank BTPN Tbk, Berau Coal Energy Tbk, Aetra Air Jakarta as well as working for Citibank, Bank Mandiri and HSBC. His last position was as CFO at PT Citra Putra Mandiri – OSO Group.

Ridwan has won a number of prestigious awards including the Best CFO Awards 2019 (Institute of Certified Management Accountant Australia-Indonesia); Asia Pacific Young Business Leader awarded by Asia 21 Network New York USA (Tokyo 2008); UK Alumni Business Awards 2008 awarded by the British Council; and The Most Inspiring Human Resources Practitioners’ version of Human Capital Magazine 2010.

He’s a member of the Board of Trustees of the Alumni Association of the Faculty of Law, Trisakti University, Co-Founder of the Paramadina Public Policy Institute and actively writes books, publications and articles in the mass media. He co-authored “Korupsi Mengorupsi Indonesia” in 2009, which helps those with an interest in understanding governance in Indonesia and the critical issue of corruption. Ridwan speaks Indonesian and English.

Per Fredrik Ecker

Managing Director of Seven Stones Indonesia, Jakarta

Per is the Managing Director of the Seven Stones Indonesia (SSI) Jakarta office and has more than 25-years’ experience in Indonesia, China, and Western Europe. He previously worked in senior management positions with Q-Free ASA, Siemens AG, and other companies in the telecom sector. Over the last six years, he has been the Chairman of the Indonesia-Norway Business Council (INBC) and recently become elected to be on the board of EuroCham Indonesia.

His most recent experience is within Intelligent Transport Solutions (ITS), Telecom, and other sectors within the Indonesian market. He is today through his position in SSI and by representing Norway Connect, promoting Nordic and European companies that would like to explore business opportunities in the Indonesian market. He’s also playing an active role to help create the Nordic House concept in Jakarta that will provide an excellent platform for Nordic companies entering Indonesia, where they’ll find a community that can offer support with trusted information and affordable services to enter this market.