Bank of Indonesia has announced developments in its plans to launch a central bank digital currency, (CBDC), for digital economic and financial transactions. The bank plans to release details on the conceptual design of a digital rupiah — a currency the equivalent of the country’s fiat — and open the matter to public comment.

According to the bank’s governor, the Bank of Indonesia intended for the digital rupiah to be integrated, interconnected, and interoperable with other countries’ CBDCs following discussions with central bank officials. The CBDC initiative, called Project Garuda, will start with the launch of a wholesale digital rupiah for use cases of issuance, redemption, and interbank fund transfer, followed by monetary operations and financial market development. The project’s white paper states that the third phase will deal with end-to-end transactions between wholesale and retail digital rupiah users.

Indonesia imposed a blanket ban on crypto payments starting in 2017, while trading in digital assets has largely remained legal in the country as regulated under the Commodity Futures Trading Regulatory Agency. The bank first announced plans for Indonesia to introduce a CBDC in May 2021 but did not provide a specific timeline for the digital currency’s release. CBDC around the world Central banks have recognized the importance of CBDC models and are working on bringing their own view to the light.

Most recently Banque de France and the Banque centrale du Luxembourg worked together on an experimental Central Bank Digital Currency (CBDC) initiative. The two central banks assisted the European Investment Bank (EIB) in the Venus Initiative, which allowed them to use an experiential CBDC for a EUR 100 million bond. Aside from France and Luxembourg central banks, the Venus Initiative involved Goldman Sachs, Santander, Societe Generale, and European Investment Bank (EIB).

In Asia, the Bank of Japan (BOJ) partnered with three major banks and regional banks to conduct a central bank digital currency issuance pilot starting in spring 2023. The pilot is set to involve testing of the offline functionality of Japan’s possible CBDC, targeting payments without an internet connection, with the central bank planning to proceed with experimenting with CBDCs for approximately two years and have a decision made by 2026. Even cash-focused countries like India are joining nations such as China in pushing forward with digital versions of their currencies as they look to optimise transactions and payments by harnessing new technologies.

The country’s finance minister said the Reserve Bank of India would launch the digital currency in 2022, and the RBI’s announcement indicates the imminent launch of a retail CBDC pilot in December 2022. .