E-commerce trend may push digital currency`s issuance: BI

E-commerce trend may push digital currency`s issuance: BI

Bank Indonesia (ANTARA FOTO/Puspa Perwitasari)

Jakarta(ANTARA News) - Bank Indonesia (BI), Indonesia`s central bank, may start to consider issuing its digital currency (CBDC), following the currently growing e-commerce trend, according to an official.

BI Director of Financial System Policy, Erwin Haryono, noted here on Tuesday that the trend of e-commerce is one of indicators for issuing some official cryptocurrency.

"If the need for a digital currency would be met by unofficial entities, it would not be stable. Hence, it should be made by the authority, and when people need it more, the bank central should take over," he remarked at a financial discussion in Jakarta.

At present, BI has been studying the positive and negative impacts of CBDC`s issuance in Indonesia, in a bid to encourage safe and secured digital finance. Similar measures were also taken by other central banks worldwide.

On the other hand, the central bank must also consider the effects of CBDC on the economy due to its risk in reducing the use of cash money and its impact on liquidity.

"Banks might lose their liquidity, and the central bank needs to take it over. The research on this kind of situation is still ongoing," Haryono remarked.

BI had started to study the CBDC`s issuance in 2017 and targeted to complete it by the end of 2020. Since then, BI has been doing a benchmarking by creating some pilot project with digital currencies that were issued in the UK, Singapore, Malaysia, and Ecuador.

When it is approved, CBDC will be using blockchain technology -- the latest integrated transaction billing system, as its platform, which is also applied by some current private digital currency, such as Bitcoin and Etherum.

Reporting by Indra Arief Pribadi
Editing by Azizah Fitriyani, Yoseph H 
 

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