The Central Bank of Indonesia has announced that it will use its forthcoming digital currency, the Central Bank (digital rupee), to combat bitcoin and other private digital assets. Indonesia believes its CBDC will be more reliable than private digital assets.
However, the bank failed to issue a CBDC in 2021, despite having previously announced it. Perry Warjiyo, governor of Bank Indonesia, said in May that it was on its way without disclosing an exact start date.
The governor emphasized that local residents are switching from cash payments to digital payments during the COVID-19 pandemic. Therefore, a CBDC that is monitored and controlled by the authorities would be the best choice for this currency conversion, the agency said.
In a recent report, Bloomberg noted that the digital rupee is being used to combat cryptocurrencies that are having a significant impact on the nation’s financial network. Judah Agung, the bank’s deputy manager, added that CBDCs are a more reliable option than Bitcoin, Ether and other personal digital assets.
Indonesia has seen a surge in the number of crypto investors, which has prompted the government to create a dedicated exchange for digital assets by the end of 2021, as the country has more than 7 million crypto investors with a transaction value of up to US$30 billion.
A few weeks ago, the National Ulema Council (MUI), the country’s leading Islamic cleric, declared operating in the crypto industry to be haram.
The agency believes this is because bitcoin and altcoins are immersed in “uncertainty, stakes and danger”. However, Chairman of the MUI Fatwa Commission Asrorun Niam Soleh stated that digital assets can be traded as commodities if they comply with Sharia law and have a “clear use”.
With a population of more than 273 million people, Indonesia is considered the most populous country with a Muslim majority.