Bank Indonesia officially launched a white paper on the development of the Central Bank Digital Currency (CBDC) or Digital Rupiah. According to the Governor of Bank Indonesia, Perry Warjiyo, the name of this project will be mentioned as the Garuda Project.

The digital Rupiah development project is referred to as the Garuda Project. Previously, this was said to be the first step and a sign of Indonesia's readiness to follow the many countries in the world that have also implemented digital versions of central bank currencies.

At the opening of Bank Indonesia's annual meeting, which was held on Wednesday, 30 November 2022, in Jakarta, Perry Warjiyo said: "Today, we launched a digital rupiah white paper project with the permission of President Joko Widodo,"

"The development of digital rupiah as the only legal digital and modern means of payment in Indonesia, we call the Garuda project," he continued. However, does this mean Indonesian banks are ready to carry out their responsibilities by installing digital money?

Bank Indonesia Officially Introduces Digital Rupiah on Their Annual Meeting Agenda

After announcing the news, which was quite encouraging for Bank Indonesia, the Governor of BI also said that the development would be carried out with careful preparation. He explained that there would be several stages for developing the digital Rupiah.

It was stated that this CBDC project would start with a business model of issuing, destroying, and providing guidelines for interbank transfers with digital Rupiah. This model will also be expanded with end-to-end monetary operations.

"Of course, developing the Digital Rupiah will require thorough collaboration with various parties. Not only with domestic parties but also with international parties and related parties," Perry explained the usage guide.

Perry also explained that in the future, the function of digital Rupiah would be the same as paper money that was already in circulation. The main difference is that it is in a digital version, but Bank Indonesia will establish this as a legal tender everywhere.

"We are finalizing all designs, features, and security for the Digital Rupiah, which will become the official legal tender in this country. We will also use it as a reference for storing digital asset value, whether in banking or e-commerce,"

Perry also said that this digital Rupiah could be used in the metaverse so that this risk-free payment instrument reduces the use of digital money issued by private parties, which has a high risk with low payment system efficiency.

The white paper launched by Bank Indonesia was conducted at the Jakarta Convention Center (JCC) in front of President Joko Widodo. It is stated that, most likely, this digital bank will be launched in 2023, so for now, it will focus on the finalization process.

Bank Indonesia Says Digital Rupiah Will Not Eliminate the Essence of Rupiah in Indonesia

Previously, Bank Indonesia had conducted several studies on digital money. BI is aware that the need for rupiah currency continues to increase, and the same goes for digitalization. And these are things considered by Bank Indonesia for quality and reliable money.

Bank Indonesia explained the essence of this digital currency by saying that it would describe the nation's narrative and history. He stressed that releasing digital money would not reduce the value of Indonesia in any Rupiah currency.

On the other hand, the Governor of Bank Indonesia (BI), Perry Warjiyo, also said that the preparation of Bank Indonesia was also to face a recession. Looking at monetary policy to maintain stability, digitalization of the payment system is also needed.

In addition, monetary policies to control inflation expectations with digital versions of currencies have been proven by many countries. So with the proper coordination system and mature simulation, the framework for maintaining the stability.

Bank Indonesia officially introduced the digital currency Rupiah, which was introduced as Garuda. With this version, it is hoped that it can help Indonesia to deal with inflation. However, the BI governor believes this will not reduce the essence of Rupiah.