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Indonesia’s central bank governor has said he aims to reveal the design of the country’s wholesale central bank digital currency (CBDC) by the end of 2022, putting banks on notice for a major technical upheaval.
In a briefing quoted by Bloomberg, Governor Perry Warjiyo said wholesale CBDC will be the exclusive medium by which Indonesian banks will be expected to transfer value to one another.
“The principle of digital rupiah is to be the only legal currency for digital transactions in Indonesia,” he said.
Warjiyo added that Bank Indonesia is currently studying cybersecurity options for the digital rupiah, while coordinating with other central banks to explore technical specifications and cross-border payment options.
The main objectives of the central bank for developing a digital rupiah include efforts to mitigate the risk of private digital currencies, improve the efficiency of domestic and cross-border payments and increase financial inclusion.
Bank Indonesia will distribute the wholesale CBDC to large banks and payment service providers (PSPs), he said, who will then sell the CBDC on to smaller banks.
Earlier this month, the central bank confirmed it is working on ongoing research into a CBDC and it plans to issue a white paper at the end of this year concerning the development of a digital rupiah.
Warjiyo has now gone further than that revealing that he expects the design for the wholesale component of the CBDC to be ready by the end of 2022.
The news comes as Indonesia settles into its G20 presidency and continues to work closely with the Bank for International Settlements (BIS) on CBDC research and development.
Earlier this month, Indonesia hosted the 2022 Digital Economy Festival in Bali, where central bankers from Asia and the West discussed how CBDC can tackle issues related to financial stability, financial inclusion and cross-border payments.
They were also joined by representatives of the World Bank, the International Monetary Fund (IMF), the BIS Innovation Hub and major commercial banks from throughout the region.
Also this month, Indonesia and the BIS Innovation Hub announced that they have selected 21 finalists for the annual G20 TechSprint on CBDCs.
As reported by VIXIO at the launch of the competition in April this year, the TechSprint will focus on solving technology challenges related to wholesale and retail CBDC.
These include building the means to issue, distribute, transfer and program CBDCs, and the implementation of financial inclusion and interoperability features.
