Bank Indonesia Ready to Launch Digital Rupiah, What's the Difference with Paper and Electronic Money?

JAKARTA - Bank Indonesia will soon launch the Digital Rupiah, which is one of the five main initiatives outlined in the 2025-2030 Indonesian Payment System Blueprint (BSPI).

So, what is the digital Rupiah and how is the Digital Rupiah different from the physical (paper) money that we currently use?

What is the Digital Rupiah?

In short, the Digital Rupiah is Rupiah issued directly by Bank Indonesia, but in digital format. However, the Digital Rupiah can be used like physical money, electronic money, and money in Card Payment Instruments/APMK (debit cards and credit cards).

The difference between digital Rupiah and physical money, electronic money, and ATMs?

According to the official BI website, the Digital Rupiah is issued by Bank Indonesia (the central bank), the same as paper and metal money, but in digital form. Meanwhile, the Rupiah in Electronic Money (UE), and APMK comes from money that is recorded or circulated in commercial banks.

The fate of paper money?

Bank Indonesia emphasized that the presence of the Digital Rupiah is not intended to replace existing money, but only to make the Digital Rupiah a legal payment complement in Indonesia.

The Digital Rupiah also has the same function as other types of payments, including as a means of exchange, as a means of storing value, and as a unit of account.

Types of Digital Rupiah?

Digital Rupiah will be issued in two types, namely:

First, wholesale Digital Rupiah (w-Digital Rupiah) with limited access coverage and only distributed for the settlement of wholesale transactions such as Monetary Operations (OM), foreign exchange market transactions, and money market transactions.

Second, retail Digital Rupiah (r-Digital Rupiah) with access coverage that is open to the public and distributed for various retail transactions both in the form of payment transactions and transfers, by personal/individuals and businesses (merchants and corporations).

Is Digital Rupiah similar to crypto assets?

Bank Indonesia also emphasized that Digital Rupiah is not the same as or is not included in crypto assets or stablecoins. Digital Rupiah is a Central Bank Digital Currency (CBDC) which is positioned as the currency of the Republic of Indonesia.