Under “Project Garuda” Indonesia is pushing further its plans for central bank digital currency (CBDC) – Digital Rupiah -starting with transactions among local banks. Last week, the central bank of Indonesia launched the design for Digital Rupiah.

This development comes at a time when other major economies, including India, have been experimenting with CBDCs. In a briefing on Monday, Governor Perry Warjiyo for the central bank said: “Digital rupiah is inevitable. It’s the transaction tool of the future”.

In an event on Digital Rupiah, Governor Perry said that the CBDC will use a technology platform that will be compatible with other central bank digital currencies. “Therefore, in terms of infrastructure, the digital rupiah can be integrated, interconnected and interoperable (with other CBDCs),” he said.

Interestingly, Perry went on to add that in the future, the planned digital rupiah currency will be used to buy products in the Metaverse. For this, Indonesia’s central bank is also ensuring that the Digital Rupiah works for cross-border payments.

Furthermore, Perry added that there will be an agreement among the central banks over the exchange rates used for digital currencies. This agreement will also include handling operational supervision along with managing cyber risks and capital flows.

(By Bhushan Akolkar)