No. 24/177/DKom
Digitalisation is changing the way people run their economic activities. Furthermore, digitalisation and the Covid-19 pandemic have accelerated the rapid growth of crypto assets as economic growth fell sharply, followed by a prudent monetary and fiscal policies that occurred evenly in all parts of the world, including Indonesia. Crypto asset 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.
A regulatory framework is required, therefore, to overcome the risks posed by crypto assets to stability. Against this backdrop, the emergence of crypto assets has further motivated central banks to explore the design and issuance of Central Bank Digital Currency (CBBC). Most central banks have conducted CBDC research and trials stage based on the unique characteristics of each jurisdiction. Meanwhile, industry support and ideas remain an important consideration for central banks when designing CBDC. Central banks remain prudent and continue to explore the potential impact of CBDC, including that of Indonesia. Bank Indonesia continues to research CBBC and plans to issue a white paper at the end of this year concerning the development of Digital Rupiah.
CBDC exploration has six salient objectives: (i) providing a risk-free means of digital payment using central bank money, (ii) mitigating the risk of non-sovereign digital currency, (iii) expanding payment system coverage and efficiency, including cross-border transactions, (iv) expanding and accelerating financial inclusion, (v) providing new monetary policy instruments, and (vi) facilitating the distribution of fiscal subsidies. CBDC issuance requires three prerequisites irrespective of jurisdiction: (i) a design that avoids creating monetary and financial system instability, (ii) an integrated, interconnected and interoperable (3i) design with financial market - payment system infrastructure, and (iii) the importance of technology during the experimental stage to understand how CBBC could be implemented (DLT-blockchain and non-DLT). That was the key message delivered by BI Deputy Governor, Doni P. Joewono, at the Digital Currency seminar as part of the second day of FEKDI 2022, as a side event of the G20 Finance Track: Finance and Central Bank Deputies (FCBD) Meeting and 3rd Finance Ministers and Central Bank Governors (FMCBG) Meeting in Nusa Dua, Bali (12/7).
The seminar also raised several discussion topics during the first Casual Talk session, presenting: (1) Division Chief of IMF, Tommaso Mancini-Griffoli, (2) Head of Secretariat, Committee on Payments and Market Infrastructures (CPMI), Tara Rice, (3) Director-General of Market Infrastructure and Payments, European Central Bank (ECB), Ulrich Bindsel, and (4) Professor from Princeton University, Markus K. Brunnermeier, moderated by the Director of Kapronasia and Emerging Payments Association Ambassador, Zennon Kapron. In the second Casual Talk Session, moderator Codruta Boar, Advisor from the BIS Innovation Hub presented: (1) Senior Lecturer, Faculty of Law and Justice, UNSW, Anton Didenko, (2) Head of FinTech Centre, Bank of Japan, Masaki Bessho, (3) Chief General Manager, Reserve Bank of India, Suvendu Pati, and (4) Lead, Payments and Market Infrastructure, World Bank, Harish Natarajan. The views of the industry were also provided by several representatives, including the President Director of Bank Jago, Kharim Indra Gupta Siregar, and Chief Economist, Bank Mandiri, Andry Asmoro.
Public access to the discussions and events of FEKDI 2022, from 11-17th July, is available virtually via https://fekdi.co.id.
Jakarta, 12th July 2022
Head of Communication Department
Erwin Haryono
Executive Director
Information about Bank Indonesia
Tel. 021-131, Email: bicara@bi.go.id
