The Bank of Indonesia is working round the clock to begin the issuance of its CBDC as a way of fighting the circulation of private digital assets in the country. The Bank believes that the Central Bank Digital Currency is more trustworthy than BTC and other alts.
Bank of Indonesia and Its Efforts on CBDC
The Central Bank of Indonesia revealed its intention to create its CBDC at the beginning of the year. The governor of the Bank, in May, revealed that it is under development and will be launched anytime soon but the announcement did not carry any specific date.
In the memo to confirm the interest in the development of its CBDC, the bank revealed that it was noted that residents embraced digital assets during the COVID-19 pandemic, and with the transition from cash, the best option will need to develop a CBDC that will be controlled and monitored by a centralized authority.
According to a talk show on Bloomberg, another reason for Bank Indonesia (BI) to issue its CBDC and fight cryptocurrencies is because of the impact of the private digital assets on the financial network of the nation. The assistant to the Governor of the Bank, Juda Agung, opined that having a central bank digital currency is a more reliable pathway than depending on BTC, ETH, and other private digital assets.
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Pending the launch of its CBDC, the country looks to create a dedicated crypto exchange in the meantime. This idea is conceived considering the number of crypto investors in the country (7 million) and also the value of crypto transactions ($30 billion). It is not worthy of mention that there was about a 50% increase in the number of crypto investors in the country in 2021 compared to 2020.
Crypto is “Haram” for Indonesians
Some weeks ago, the MUI – National Ulema Council – which is the top Islamic body in Indonesia has come up with propaganda that it is against cryptocurrencies. It went further to name the asset class and its operation, “Haram” – a term used for forbidden things in Arabic.
As stated by Asrorun Nam Soleh, what caused the rejection is the idea that the crypto market is speculative and much volatile. The chairman of the commission in Fatwa, however, explained that the assets can be treated as commodities and be traded as such only if it obeys the sharia law.
Indonesia is the most populated Muslim-majority country; therefore, it is expected that the development of the community affects the growth of the crypto space in the country.
