The massive flow of digitalization has also had an impact on various essential sectors, including the financial industry. Hence, the topic of financial digitization in Indonesia has started to be discussed since Bank Indonesia wants to launch a Central Bank Digital Currency (CBDC). CfDS discusses this issue together in Difussion #79 entitled “The Discourse of Digital Rupiah Legalization: is Indonesia Ready?”, on Tuesday (04/10). This discussion invited M. Abdi Dzil Ikhram W (Lecturer at Faculty of Economics and Business, Brawijaya University) dan Jasmine Putri (CfDS Researcher) as speakers and moderated by Eka Nur Raharja (CfDS Research). The excitement of the event can be re-watched through this link: https://www.youtube.com/watch?v=Cszh3F08HQs
M. Abdi Dzil Ikhram W shared his explanation by mentioning the preparation of Indonesia in addressing Central Bank Digital Currency (CBDC), covering the conditions of financial inclusion and the challenges that will be faced. According to him, the issue of security and privacy still need to be improved to avoid cyber-attacks and other forms of hacking. In addition, there are still people who are unfamiliar with digital-based economic, indicating that Indonesia is not fully ready to apply CBDC in Indonesia.
Furthermore, in his presentation, Abdi Dzil said our currency in the digital framework has significant (positive) impacts, as in providing new monetary policy instruments, aiding the distribution of fiscal subsidies, and expanding the scope of our payment system, including cross-border economic transactions. However, this also cannot be separated from the challenges that Indonesia is facing, such as the large number of people, low digital economic literacy, and the information about the system that is not fully known to the public.
“The public also needs to be informed about this issue, as well as the discourse. In this case, the government, industry, and stakeholders must work together in implementing CBDC in Indonesia. If this implementation goes well, the level of effectiveness will rise higher too,” said Abbi.
In Response to Abdi, Jasmine Putri discussed more deeply about the impact of the digital currency system on the Indonesian economic sector. “This has the potential to increase the growth of our capital market, open up new business opportunities, and overcome the risk of crypto asset stability,” said Jasmine. She also added that CBDC can be used as a transactions instrument on our daily basis.
As a recommendation, Jasmine emphasized the CBDC development strategy must be “adjusted” with the economic landscape of each country, including the system, the level of economic literacy, and the quality of the human capital.
“The development of CBDC needs to be supported by comprehensive policies from all sectors and stakeholders. This support is a form of collaboration in designing the concept of CBDC and cross-border payments. The implementation process needs to be well-prepared because the outputs will greatly give positive impacts on people’s lives,” stated Jasmine.