Bank Indonesia (BI) has announced that its roadmap for the country’s own central bank digital currency (CBDC) named the “digital rupiah” will start with a wholesale design, in a move that may bring the country closer to finally implementing the long-awaited digital currency. The roadmap was launched within a white paper named after the country’s mythical creature “Project Garuda,” with an aim to explore possible designs to implement the digital rupiah. Its development will be divided into three stages with the first two only involving banks and BI’s roles.
BI will start the CBDC development for wholesale digital rupiah, but the functions will be limited to issuance, redemption, and transfer of funds, which the central bank sees as the most feasible for the initial stage. For the next phase, the digital currency will be expanded to support financial market transactions and monetary operations. The last stage, meanwhile, will integrate wholesale and retail design with the latter involving functions of distribution and collection, as well as peer-to-peer transfers and payments, which will finally be available for the general public.
“At the end, we will integrate both wholesale and retail digital rupiah end-to-end with synergy and collaboration nationally and internationally,” BI Governor Perry Warjiyo told audiences in BI’s annual meeting on Wednesday.
The white paper also stated that only limited parties designated by BI could have access to the wholesale rupiah by converting their reserves at the central bank. These wholesalers could be the ones distributing digital rupiah to customers through retailers such as banks and digital payment system firms or distributing it directly to consumers by themselves.
BI, too, could interact with consumers without the need to be bridged by wholesalers or retailers as intermediaries. The white paper wrote that banks generally are those considered suitable for the wholesalers’ role, whereas involvement from non-bank financial institutions will further increase operational exposures and systemic risk.
December 3, 2022, The Jakarta Post
(https://www.thejakartapost.com/paper/2022/12/03/bi-to-develop-wholesale-cbdc-soon-experts-suggest-prioritizing-on-retail.html)