Indonesia Planning To Oust Bitcoin With Its CBDC

December 05, 2021

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The Central Bank of Indonesia has announced its intention to use its upcoming central bank digital currency (CBDC) — the digital rupiah, to compete fervently with Bitcoin and other private digital assets. Indonesia believes that in all ramifications, its CBDC would be even more superior than all other private digital assets.

Indonesia Initially Planned To Launch The Digital Rupiah In 2021

Meanwhile, all efforts by the Bank of Indonesia to launch its CBDC in 2021 have failed. Recall that the governor of the Bank, Perry Warjiyo had announced the upcoming CBDC since May without exactly stating a specific date it would launch.

At the time, Warjiyo cited that the COVID-19 pandemic was largely responsible for pushing locals to switch from cash payments to digital payments. And that therefore, it was only necessary to come up with a CBDC that would be completely controlled and monitored by the authorities.

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Meanwhile, recent reports by Bloomberg also confirms how Indonesia intends to use the digital rupiah against cryptocurrencies.

Indonesia boasts of over 7 million crypto investors, and the figure is still rising. It is this spike in the number of investors, that has forced the government’s hands to create a dedicated digital asset exchange, that was initially slated for the end of 2021

Crypto or ‘Haram’-currency?

Some weeks ago, Indonesia’s top Islamic body, the National Ulema Council tagged all crypto-related activities as ‘Haram,’ that is, forbidden.

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The body argued that there’s a lot of uncertainties attached to Bitcoin and other altcoins. But even at that, the Fatwa Commission Chairman of MUI, Asrorun Niam Soleh, explained that digital assets can only be traded as a commodity, when they clearly obey the Shariah law and indicate the potential of coming with a “clear benefit.”