The use of cryptocurrency as a legal payment in Indonesia is still prohibited. However, in 2022, Indonesia has started to develop a digital currency called the Indonesia Central Bank Digital Currency (CBDC). It is different from cryptocurrencies because they are legal and managed by Bank Indonesia so that the volatility of their value is expected to be more stable.
CBDC emerged as a sustainable solution (future proof) and is seen as capable of bridging the public’s needs and transacting in the digital age along with the central bank’s needs to maintain the system continuity for ongoing finances.
Garuda Project
The Garuda Project is an initiative that underlies the exploration of the Indonesian CBDC design, which is called the Digital Rupiah. It complements Bank Indonesia’s various initiatives in promoting the national digital transformation agenda, which is currently being pushed through the Indonesian Payment System Blueprint 2025 (BSPI 2025) and Money Market Development Blueprint 2025 (BPPU 2025).
What is digital rupiah?
Digital rupiah is Bank Indonesia’s contribution to the country in the struggle to maintain the currency sovereignty in the digital era. Digital rupiah will be issued in two types: Digital Rupiah wholesale (w-Digital Rupiah) and Digital Rupiah retail (r-Digital Rupiah), which will be developed with an end-to-end integrated approach from wholesale to retail. W-Digital Rupiah will only be limited to be used by the parties that are appointed by Bank Indonesia, while r-Digital Rupiah can be used by the public just like banknotes and coins.
With digital rupiah, the public will have access to be free from digital money risk. On the contrary, Bank Indonesia can still maintain public services while maintaining trust against the rupiah. It will not eliminate the existence of cash and electronic money, but only add more transaction options.
Digital rupiah vs e-Wallet
| Digital rupiah (CDBC) | e-Wallet/e-Money |
| Issued by the central bank (Bank Indonesia) | Issued by private companies |
| A substitute for banknotes and coins | A payment in electronic form |
| Its circulation is controlled by the central bank | The monetary value is stored in a certain electronic media before use |
| Can be use as a payment for physical and non-physical goods such as Web 3.0, Metaverse, etc. | Only be a medium of transactions for physical goods |
Public reactions to digital rupiah
Many people think the digital rupiah is the same as crypto. This is why they have a concern regarding its security system due to its vulnerability for fraud. The younger generation, who have been exposed to technology, will prefer the digital rupiah because it is more suitable for their needs. Meanwhile, the older generations are more likely to use cash or a bank account rather than the digital rupiah in their daily transactions.
Different reaction came from industry players such as Indodax crypto trading platform CEO Oscar Darmawan who said the movement to use digital rupiah was a good signal to improve the digital economic ecosystem. Therefore, Indonesia would not be left behind from other countries. With the establishment of the digital rupiah, Darmawan actually thinks this step will strengthen Indonesia’s digital economic ecosystem. Both stakeholders have the same goal of increasing digital financial literacy as well as improving the economy and welfare of the nation.
