Indonesia Propels the Push for Digital Currencies’ Inclusion in Central Banks

News / 29.05.2021

According to Governor Perry Warjiyo, Bank Indonesia aims to introduce a digital rupiah currency. The country’s Central Bank has not yet decided which platform to use to utilize the currency, but the debate is ongoing. Indonesia saw a rise in digital currency transactions from the onset of the global pandemic COVID-19.

As more countries continue to adopt the Central Bank-issued digital currencies, Indonesia doesn’t want to lag. In a report released last year, the number of crypto users in the country hit over 1.5 million. The same report also revealed that it had traded over 152 cryptocurrency-based projects among the Indonesian population.

Due to the uprise in digital currency trades, the nation’s Central Bank decided to prioritize digital payments. Bank Indonesia is now scouring for ways to incorporate digital rupiahs into the financial scene.

Joining the CBDC Bandwagon

Alongside Hong Kong, South Korea, and Thailand, Indonesia joins the list of Asian countries employing CBDCs. Due to the large population in the Asian continent, banks cannot handle the big financial demand that comes with the big number. Thus, a large percentage of citizens within the regions are lacking decent financial services.

According to Bank Indonesia’s data, digital banking transaction numbers jumped 46% since last year, reaching $217B. The Bank also recorded that digital transactions were 570 million times since April last year. Governor Warjiyo capped the operative angle on digital rupiah’s usage, saying, 

“We’re also, of course, considering our options on the technology that we will use.”

The crypto-watch report released in 2020 showed Indonesia has almost 80% of its population unbanked. When the global pandemic hit, several people in the country were incapable of making payments through banks. They resorted to digital payments, which led to the massive rise in digital transactions within the country.

However, the ban on cryptocurrency payments within the country still stands. Nonetheless, the move to include Central Bank-issued digital currencies spells a good sign for cryptocurrency worldwide.

Indonesia Moves to Tax Cryptocurrency Trades

Tax officials in Indonesia announced their plans to tax crypto trades in the country following the rise in the popularity of cryptocurrency in the region. Nonetheless, Indonesian Tax office spokesman Neilmaldrin Noor revealed the taxation probe is under discussion. Noor acknowledged that any profits gained from crypto trades are subject to taxation. He added,

“So the taxpayer who receives capital gain has to pay the tax and report it.”

Most Asian countries have banned cryptocurrency as a payment method but allow trades of digital assets as commodities.

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Wayne is a Blockchain enthusiast and expert in crypto trading. Currently, he covers trendy issues on digital currencies.