To flare up the payment methods, the central bank of Indonesia proceeds towards issuance of a Central Bank Digital Currency (CBDC). It is for the first time that a digital currency is being officially announced as a source of payment. Therefore, the appropriate medium for the distribution of digital currency is, at present, undecided and under evaluation. The government of Indonesia is pondering over the best utility of the newly introduced CBDC in the national economy.
On the 25th of May 2021, during an online broadcasted news discussion, Perry Warjiyo, the governor of the Bank of Indonesia, shared his opinion that the digital rupiah and banknotes will be simultaneously acknowledged as legal means of payment after the dispensation of CBDC (Central Bank Digital Currency). While on the other hand, the appropriate schedule for its issuance has not been disclosed yet by the central bank.
Throughout Indonesia, which is considered to be the preeminent economy of South Asia, it has been recorded that the transactions of digital currency have been escalated during the pandemic of COVID-19. In April, according to Reuters, the number of dealings done through digital currency exceeded up to 60% at 570 million points annually. Simultaneously, its price level expanded up to 46% extending to 3,114 trillion units of the Indonesian currency, approximately around $217.5 billion.
In the current year, cryptocurrency is seeking the attention of numerous financial institutions from all over the globe. World’s top economies are now proceeding towards forming their digital currencies aiming at flourishing the economic practices. Although in Indonesia, the practices of transaction through cryptocurrency are banned yet, trading of digital assets is still legal.
To take benefit out of it, at the start of the coming month, the Indonesian government is heading towards implementing tax profit on the trade of cryptocurrency. The government of Indonesia has declared that the only legalized digital currency will be the digital rupiah to prevent business through the currencies, which are less beneficial for the central bank economy.
In the coming days, there is a collaboration expected between Indonesia and the other countries having central banks like Thailand, South Korea, and Hong Kong as aforementioned countries are anticipated to launch their Central Bank Digital Currencies (CBDC) while China is leading in this particular stance and considered to be the highest-grossing economy of the world and has recently initiated a citywide pilot program to test the digital Yuan to evaluate the possibility to launch and inculcate into the economy.