Indonesia plans to issue a central bank digital currency

Bank of Indonesia, the central bank of Indonesia, is planning to issue a digital currency to speed up payments.

The central bank is currently assessing which technology to use for its digital rupiah, governor Perry Warjiyo told a streamed news conference on Tuesday, according to a Reuters report. Once issued, the digital rupiah will be a legal payment instrument in Indonesia, alongside banknotes. But the central bank doesn’t have a timeline yet on when it will issue it.

Indonesia, Southeast Asia’s biggest economy, has reportedly seen an increase in digital banking transactions during the COVID-19 pandemic. Per Reuters, the country’s transaction frequency in digital banking platforms rose over 60% on an annual basis to more than 570 million times in April, while value increased 46% to reach nearly 3,114 trillion rupiah (almost $217.5 billion).

While cryptocurrencies as a payment method are banned in Indonesia, it’s legal to trade them. Earlier this month, the government of Indonesia said it is planning to tax profit on crypto trades.

With today’s news, Indonesia joins a list of Asian countries that are exploring a central bank digital currency or CBDC. Hong Kong, Thailand, and South Korea are all currently working towards launching CBDC pilot programs. China, which is ahead of most countries worldwide, is nearing the launch of the digital yuan soon.