Indonesia's Central Bank Considers Issuing Digital Currency to 'Fight' Crypto

Bank Indonesia, the country’s central bank, is reportedly considering issuing a central bank digital currency (CBDC) to fight the use of cryptocurrency. “A CBDC would be one of the tools to fight crypto. We assume that people would find CBDC more credible than crypto,” said an assistant governor of the central bank.

Central Bank Sees CBDC as Tool to ‘Fight Crypto’

Juda Agung, an assistant governor of Bank Indonesia, the country’s central bank, talked about cryptocurrency and central bank digital currency (CBDC) during his parliamentary “fit and proper test” to become the deputy governor of the central bank.

He said that Bank Indonesia wants to issue a digital rupiah to be used as legal tender to fight cryptocurrency, Bloomberg reported, noting that the central bank has been looking into this issue since the beginning of the year.

In Indonesia, crypto assets are traded alongside commodity futures and are regulated by the trade ministry, the assistant governor explained. However, he emphasized that they have a significant impact on the country’s financial system, elaborating:

A CBDC would be one of the tools to fight crypto. We assume that people would find CBDC more credible than crypto. CBDC would be part of an effort to address the use of crypto in financial transactions.

According to the trade ministry, about 7.4 million Indonesians invested in crypto assets as of July, doubling from last year. Their crypto transactions totaled approximately 478.5 trillion rupiahs ($33.3 billion). The Indonesian government is pushing forward with plans to set up a dedicated crypto exchange.

Meanwhile, Indonesia’s Ulema Council (Majelis Ulama Indonesia or MUI), the country’s top Islamic body that holds the authority on Shariah compliance, recently declared the use of cryptocurrency haram, forbidden under Islamic law for Muslims.