Indonesia’s central bank eye CBDC trial for 2024

Indonesia’s central bank, Bank Indonesia (BI), has announced its plans to conduct a trial for a central bank digital currency (CBDC) in 2024. This trial will involve collaboration with leading commercial banks and will focus on wholesale interbank settlement using blockchain technology. The digital currency, known as the digital rupiah, has undergone previous studies, including a proof-of-concept completed in 2022. The upcoming pilot will involve testing the technological and regulatory architecture required for the digital rupiah’s rollout. BI Governor Perry Warjiyo emphasized the importance of maintaining the sovereignty of the rupiah in the digital era, describing a wholesale CBDC offering as the key focus. In addition to local interbank payments, the pilot will explore cross-border settlements, tokenization, and use cases in foreign exchange transactions and the metaverse. Indonesia’s central bank aims for interoperability with CBDCs from other jurisdictions, suggesting a phased rollout approach. Initially, the digital rupiah will be used for monetary operations and the money market before extending to retail use. As part of the regulatory changes to support the CBDC rollout, Indonesian regulators are implementing stricter rules for digital assets. This includes classifying digital currencies as securities and requiring exchanges to ensure clear separation of funds to prevent asset commingling. The Ministry of Trade has also mandated two-thirds of digital exchange directors to be domiciled in Indonesia. Additionally, the country is exploring the establishment of a national digital currency exchange to promote uniformity within the industry instead of imposing an outright ban.