Indonesia’s Central Bank considers its own digital currency to ‘fight’ crypto

Bank Indonesia is considering developing a central bank digital currency (CBDC) parallel to the rupiah to counter cryptocurrency in the country.

Juda Agung, Assistant Governor of Bank Indonesia, said in parliament that crypto assets are traded alongside commodity futures and are overall regulated by the trade ministry despite its significant effects on the financial system, according to a report by Bloomberg on Tuesday.

“A CBDC would be one of the tools to fight crypto,” Agung said to Bloomberg. “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.”

The central bank’s caution of cryptocurrency may contribute to the dilemma for the roughly 7.4 million Indonesians who invest in digital assets. Indonesia’s national religious council, The National Ulema Council, declared cryptocurrency as haram, essentially forbidding all Muslims from holding crypto assets due to its unstable and possible harmful nature.

The Indonesian government is pushing to establish a dedicated crypto exchange from as early as this year.