CBDC with Stablecoin Mechanics: Indonesia’s Digital Rupiah to Be Backed by Government Bonds
Bank Indonesia (BI) is advancing its central financial institution digital foreign money (CBDC) venture with a brand new mannequin that integrates stablecoin mechanics, making the upcoming digital rupiah one of many world’s first sovereign digital currencies backed by authorities bonds.
The initiative, announced by BI Governor Perry Warjiyo on the Indonesia Digital Finance and Economy Festival and Fintech Summit 2025 in Jakarta, represents a serious step within the nation’s monetary digitalization beneath Project Garuda.
Can Government Bonds Make a CBDC Truly Stable? Indonesia Thinks So
Governor Warjiyo revealed that the digital rupiah can be supported by “digital central financial institution securities,” tokenized variations of presidency bonds, recognized regionally as Surat Berharga Negara (SBN).
“We will subject Bank Indonesia securities. We have a digital model, a digital Bank Indonesia rupiah with underlying authorities bonds, and a nationwide Indonesian stablecoin model,” he mentioned.
This strategy successfully combines the safety of a central bank-issued foreign money with the steadiness of an asset-backed digital token, creating what BI officers describe as a “nationwide stablecoin.”
The mannequin ties the worth of the digital rupiah straight to authorities bonds via tokenization, making certain that every unit of digital foreign money is underpinned by a tangible, secure asset.
Bank Indonesia’s new framework aligns with its broader digital finance agenda, which focuses on increasing innovation and acceptance, strengthening industrial constructions, and sustaining monetary stability.
The transfer additionally builds on the success of the Project Garuda proof-of-concept completed in December 2024, which examined distributed ledger expertise (DLT) platforms corresponding to Corda and Hyperledger Besu for digital foreign money issuance, redemption, and fund transfers.
Bank Indonesia has efficiently accomplished the primary section of its digital Rupiah venture#DigitalRupiah #Indonesiahttps://t.co/eG515hcDNt
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Under the bond-backed design, BI will tokenize authorities bonds to subject digital securities constructed atop the CBDC infrastructure.
The system goals to improve market liquidity by making bond settlement sooner and extra clear whereas lowering transaction prices via blockchain-based automation.
What differentiates Indonesia’s CBDC With Stablecoin Twist From Private Stablecoins
Indonesia’s central financial institution says the hybrid CBDC will present a number of benefits, together with higher financial coverage management, improved cost effectivity, and enhanced safety.
Unlike personal stablecoins, which carry credit score and issuer dangers, the digital rupiah can be a direct legal responsibility of the central financial institution. Officials imagine this construction will reinforce public belief whereas providing sooner, cheaper, and extra programmable funds domestically and internationally.
The central financial institution’s plan to subject a bond-backed CBDC may assist counter the rising affect of personal digital currencies whereas preserving nationwide financial sovereignty.
Through Project Garuda, BI goals to present a safer, government-backed various to privately issued stablecoins, providing value stability, regulatory oversight, and monetary inclusion.
Notably, the rollout will happen in phases, beginning with a wholesale digital rupiah for interbank transfers earlier than increasing to a retail model for the general public.
Bank Indonesia’s Digital Rupiah Project Enters New Stage Amid Rapid Crypto Expansion Nationwide
Deputy Governor Juda Agung beforehand stated that findings from the proof-of-concept will kind the muse for the following growth section, specializing in scalability and operational readiness.
The venture’s design emphasizes interoperability throughout digital platforms, making certain that the digital rupiah can combine seamlessly with current cost methods and worldwide requirements corresponding to ISO 20022.
Indonesia’s strategy stands out globally. While China’s e-CNY focuses on retail use and state management, and the Bahamas’ Sand Dollar targets monetary inclusion, Indonesia’s mannequin blends each components, central belief and asset-backed stability.
Unlike Singapore’s Project Orchid or Hong Kong’s e-HKD, which prioritize programmability and personal collaboration, Indonesia’s CBDC straight incorporates stablecoin-style asset backing to guarantee long-term stability.
Beyond coverage innovation, the digital rupiah comes amid fast development in Indonesia’s crypto sector.
— Cryptonews.com (@cryptonews) November 29, 2024
The nation recorded over 475 trillion rupiah (around $30 billion) in crypto transactions by late 2024, a 352% enhance from the earlier 12 months, with greater than 21 million merchants now collaborating.
According to a examine by the University of Indonesia, the crypto business contributed $4.4 billion to GDP in 2024 and generated over 333,000 jobs.
Notably, Indonesia secured the seventh place in Chainalysis’s 2025 Global Crypto Adoption Index.
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