We publish this report as a form of Bank Indonesia's transparency in developing the Digital Rupiah design. This report constitutes a summary of the public comments on the Consultative Paper Project Garuda: Wholesale Digital Rupiah Cash Ledger received by Bank Indonesia between January 31, 2023, and July 15, 2023, responding to the w-Rupiah Digital immediate state use cases, i.e., issuance, transfer, and redemption.
The Consultative Paper included 35 questions, which were divided into two parts, namely functionality and general considerations, and then further classified into six categories: i) access (participation, data and wallet access); ii) issuance and redemption; iii) funds transfer, gridlock resolution and settlement finality; iv) technical capability and 3i aspects (interconnection, interoperability and integration); v) technology (scalability and resilience); and vi) implications towards the Payment System and Financial and Monetary Systems.
The participation and input of these diverse stakeholders is essential for broadening the perspective in developing the Digital Rupiah design that best meets the needs of the industry and the public.
Full access of the report.
What is a CBDCs?
CBDCs are a new form of central bank money which is the liability of the central bank, is denominated in the national official currency, and could serve as a medium of exchange, unit of account, or store of value.
The framework of Digital Rupiah: why, what, and how?
The idea to develop Digital Rupiah as the Indonesian CBDC is driven by three key factors. First, the status of Bank Indonesia as the sole institution with the authority to issue the Indonesian currency. Second, the prolonged effort of Bank Indonesia to strengthen its role in the international stage. Third, the necessity to accelerate integration of national digital economy and finance.
Based on these key drivers, Digital Rupiah design will then be formulated to achieve three objectives. First, Digital Rupiah as a digital legal tender for the Republic of Indonesia, complementing banknotes and coins. Second, Digital Rupiah as a core instrument for Bank Indonesia in carrying out its mandate in the digital era. Third, Digital Rupiah as a primary element in supporting the development of national financial systems and the integration of national digital economy and finance.
What are the stages of Digital Rupiah Development?
There will be 3 (three) phases of Digital Rupiah development: immediate phase, intermediate phase, and final phase. Each phase will start with public consultations (consultative papers and focus group discussions), followed by technological experimentation (proof of concept, prototyping, and piloting/sandboxing), and conclude with policy stance review.
Disclaimer: Bank Indonesia believes that Digital Rupiah has the potential to preserve the sovereignty of Rupiah in the digital era, including supporting integrated digital economy and finance as well as creating the opportunities for more equitable and sustainable financial inclusion. Nonetheless, most central banks are still mindful before taking a decision to issue a CBDC for the public. There are stages of further experimentations and discussions required. There is no one-size-fits-all solution in the development of CBDC as each country has its own unique characteristics and specific policy contexts.
