CORE: People Are Still Very Common, BI Should Be Thoughtful Of Digital Money Risks

Bank Indonesia Building. (Angga Nugraha/VOI)

JAKARTA - The Center of Reform on Economics (CORE) said that Bank Indonesia must map potential risks before issuing a digital currency or Central Bank Digital Currency (CBDC).

"What Bank Indonesia needs to emphasize or deepen is to issue or examine how much risk is behind this digital currency transaction, because I believe the public is still completely unfamiliar with this digital currency," said Economist Core Yusuf Rendy, quoted from Antara, Friday May 28th.

Even though the risk of digital currency is still gray, Yusuf continued, this consideration must be studied in depth by Bank Indonesia (BI), including the risks that will arise from digital technology infrastructure.

"What risks can be obtained when a digital network in an area goes out, will the transaction value be lost or what should be prepared," said Yusuf.

Therefore, he also suggested that BI strengthen coordination with relevant stakeholders such as the Ministry of Communication and Information Technology (Kominfo) and telecommunications operators to ensure equal distribution of digital technology infrastructure.

In addition, BI also needs to coordinate with the financial industry such as the Financial Services Authority (OJK) regarding digital currency supervision and the Ministry of Finance regarding the implementation of digital money.

"Regarding their readiness to supervise whether there are regulations that need to be added, that needs to be discussed with the OJK," said Yusuf.

Furthermore, Yusuf said that BI must consider the financial literacy of the Indonesian people because based on the OJK survey in 2019, Indonesia's financial literacy index only reached 38.03 percent.

"Even though the regulations are ripe then the infrastructure has been prepared, but when the public's literacy of financial products, in this case the digital currency, is still lacking, this is the next homework," he explained.

Although it is necessary to prepare many things before implementing digital currency, CORE welcomes BI's plan to implement digital money because digital finance has been widely applied in financial transactions in the form of payments and investments.

"This is something that is difficult to avoid. Sooner or later, Indonesia will be in the use of digital currency. So BI has already taken steps to prepare a digital currency," he said.

Meanwhile, BI Governor Perry Warjiyo stated that he would issue a digital currency and his party had three considerations related to the plan.

First, digital currency is a mandate of the 1945 Constitution, which is spelled out through the Currency Law and the Bank Indonesia Law. Second, digital currency will support the implementation of monetary, macroprudential and payment system policies including the preparation of financial market infrastructure, foreign exchange and the financial sector.

And the third consideration is the technology that will be used by looking at the technology or platform used by other countries.