Bank of Indonesia announces plans to release digital Rupiah whitepaper
During the Digital Currency Conference held in Bali on July 12, the Deputy Governor of the Bank of Indonesia, Doni Primanto Joewono, revealed plans for the development of the Bank of Indonesia CBDC, the Digital Rupiah.
- Mr. Joewono, the Bank of Indonesia’s deputy governor, revealed plans for the Bank of Indonesia CBDC in a speech this week.
- The Deputy Governor of Indonesia’s Bank of Indonesia acknowledged the significance and potential impact of bitcoin adoption on Indonesia’s economy and overall well-being.
- Digital rupiah will be utilized to facilitate trade and commerce in Indonesia, allowing for greater regulatory control over cryptocurrencies and monitoring and tracking the movement of funds in Indonesia.
Indonesia is known as one of the top adopters of cryptocurrency after Brazil, which has the highest number of cryptocurrency adopters and holders. In a survey conducted by Gemini among around 300,000 people in 20 countries, it was discovered that about 41% of the questioned population in Indonesia were cryptocurrency holders.
This was a very high percentage as compared to other leading economies like the United States and the United Kingdom, which had 20% and 18%, respectively.
Although the inflation rate in Indonesia is quite high, about 64% of the questioned citizens of Indonesia own a fair share of cryptocurrency holdings. According to research, most of the citizens of Indonesia that participated in the survey agreed that they hold cryptocurrency in a bid to hedge against inflation and so are in it for the long term in the hopes of their investments multiplying.
The Deputy Governor of the Bank of Indonesia, speaking during the seminar, acknowledged the importance and possible impact of cryptocurrency adoption on the Indonesian economy and the general well-being of the state.
The Covid19 pandemic had a great impact on most economies of the world, including Indonesia. However, Joewono argued that cryptocurrencies could help Indonesia’s financial system and give people access to useful financial products.
He also emphasized that since the COVID-19 pandemic hit the world, digitization had changed people’s lives and forced them to cut back on social interactions.
The governor argued that these digital services will continue to be popular even after the coronavirus health emergency has ended and that they will support the future expansion of the cryptocurrency industry.
BI deputy governor, Mr. Joewono, further declared that crypto assets have the potential to promote financial inclusion and enhance financial system efficiency, yet also represent a new area of risk that could impact economic, monetary, and financial system stability.
The importance of cryptocurrencies to the economies of every state was mentioned, but it should be noted that as much as cryptocurrency would have a great impact, it cannot also go without proper regulation.
According to Mr. Joewono, the development of digital rupiah in Indonesia will be a step towards adoption and regulation of cryptocurrency in Indonesia as well as monitoring and tracking of the movement of funds in Indonesia to prevent outrage of illegal activities that could be conducted using cryptocurrency.
According to the BI deputy governor, the development of the Digital Rupiah will require quite a while to be completed. Although the whitepaper for Digital Rupiah will be released by the end of this year.
With the large-scale growth and adoption of cryptocurrencies, most nations have come to realize the impact of cryptocurrencies on the economy. Notwithstanding, there is also the issue of the high risk and volatility associated with the cryptocurrency markets.
This is why central banks are coming up with their own central bank digital currencies and regulation rules in most countries of the world. Most countries, including China, and the Bank of England, etc., have recently come up with announcements of plans for CBDC development, and the Bank of Indonesia is certainly not left out of it.
Due to these recent developments, there is an increase in demand for advisors, technical personnel, and designers to aid in the research and development of these CBDCs. These advisors have to be well versed in cryptocurrency legalities and how to better design CBDCs to provide better services and aid the government in tracking and monitoring financial transactions used within these CBDCs.
Even with all the possibilities of digital currencies, many central banks remain prudent while still researching and exploring the possible impact of CBDCs on the economy and financial systems, including the Bank of Indonesia.
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