Digital rupiah trial in 2024 as part of national payment in Indonesia

pantaiema

Well-Known Member
Cager
Joined
Apr 15, 2022
Messages
1,428

This has been long in the pipeline but finally it will be in trial phase next year.
It is essentially an electronic representation of the official Indonesian currency, the rupiah, which is the recognized fiat currency of Indonesia.

Importantly, it should be emphasized that this is not a cryptocurrency. It operates in a centralized manner, meaning it is issued and overseen by a central authority, specifically the Indonesian central bank. Its functionality is integrated into the established structure of the country's monetary system.

In my view, the digital rupiah in Indonesia holds promise for combating corruption due to its foundation on transparent technologies, offering a clearer and traceable transaction record.

However, the challenge with corruption in Indonesia lies deeply in the cultural aspects, involving all branches of government, including the Legislative, Executive, and Judicial. Addressing this issue requires a comprehensive approach, including reforms in recruitment processes and thorough vetting of individuals in positions of authority, such as police officers, judges (including those in the Supreme Court), prosecutors, and tax officials. Without addressing these systemic issues, meaningful solutions to corruption are unlikely to be achieved.
 
Last edited:
97% of the existing money is digital already. The "physical" money (coins and notes) represents only 3%. The rest is 1 or 0 in a computer.

UK numbers, may be a little differet here.

 
It is a slow day in a little Greek village. The rain is beating down and the streets are deserted.

Times are tough: everybody is in debt, and everybody lives on credit.

On this particular day a rich German tourist is driving through the village, stops at the local hotel and lays a €100 note on the desk, telling the hotel owner he wants to inspect the rooms upstairs in order to pick one to spend the night.

The owner gives him some keys and, as soon as the visitor has walked upstairs, the hotelier grabs the €100 note and runs next door to pay his debt to the butcher.

The butcher takes the €100 note and runs down the street to repay his debt to the pig farmer.

The pig farmer takes the €100 note and heads off to pay his bill at the supplier of feed and fuel.

The guy at the Farmers’ Co-op takes the €100 note and runs to pay his drinks bill at the taverna.

The publican slips the money along to the local prostitute drinking at the bar, who has also been facing hard times and has had to offer him “services” on credit.

The hooker then rushes to the hotel and pays off her room bill to the hotel owner with the €100 note.

The hotel proprietor then places the €100 note back on the counter so the rich traveller will not suspect anything.

At that moment the traveller comes down the stairs, picks up the €100 note, states that the rooms are not satisfactory,
pockets the money, and leaves town.

No one produced anything, no one earned anything.

However, the whole village is now out of debt and looking to the future with a lot more optimism.
 
A very small and poor Italian village twins itself with a very small and poor Greek village. The Greek Mayor is invited to the Italian village, where he is picked up by the Mayor in a smart Mercedes limo, taken to a sparkling new Town Hall and then shown around the wonderful facilities of the village including a new tennis court, swimming pool etc. Amazed, the Greek Mayor asks his counterpart how he did it. "Well the European Union gave us funds to build that new dual-carriageway viaduct over there" says the Italian, waving his hand across the valley towards a single-lane bridge. "But that's not a dual-carriageway" says the Greek. "Exactly" replies the Italian, tapping the side of his nose and winking.

A year later, a reciprocal visit is arranged and the Italian is amazed to be picked up in a Maybach and taken on a tour of the most fabulous facilities.
Italian Mayor: "How on earth did you manage that?"
Greek Mayor: "Well you see that magnificent dual-carriageway bridge over there?"
Italian Mayor: "No"
 
97% of the existing money is digital already. The "physical" money (coins and notes) represents only 3%. The rest is 1 or 0 in a computer.

UK numbers, may be a little differet here.


When you mentioned that 97% of the current money is already digital, I'm uncertain whether you grasp the distinction between digital transactions involving money or currency and the forthcoming concept of digital rupiah set to be introduced in 2024.

A disparity exists between the two. In the case of digital payments or transactions using various eWallets for instance that have been in use for a considerable period, there is a tangible connection to physical printed banknotes and their corresponding background. In contrast, digital rupiah completely eliminates the necessity for physical printed IDR banknotes. It proves more efficient for the central bank since there's no need for paper and coin production. For individuals, it eliminates the necessity to carry cash or maintain a physical money box for savings, and it also facilitates easier transaction tracking.

Digital rupiah is categorized the so called the Central Bank Digital Currency (CBDC). Because it is issued by the central government, and its value relies on the trust and confidence people have in the government, it maintains its classification as a fiat currency.

It's important to highlight that, as of now, the UK government has not introduced any digital version of the GBP.
 
Last edited:
When you mentioned that 97% of the current money is already digital, I'm uncertain whether you grasp the distinction between digital transactions involving money or currency and the forthcoming concept of digital rupiah set to be introduced in 2024.

A disparity exists between the two. In the case of digital payments or transactions using various eWallets for instance that have been in use for a considerable period, there is a tangible connection to physical printed banknotes and their corresponding background. In contrast, digital rupiah completely eliminates the necessity for physical printed IDR banknotes.

Digital rupiah is categorized the so called the Central Bank Digital Currency (CBDC). Becuase it is issued by the central government, and its value relies on the trust and confidence people have in the government, it maintains its classification as a fiat currency.

It's important to highlight that, as of now, the UK government has not introduced any digital version of the GBP.
Cash in circulation is only 3-4% of all money in the system, in almost every country. Money on gyro, current and other accounts is around 97%, in form of digital/bank record, and that has been for decades.

Moreover, digitalizing the cash allows the government to completely monitor all transactions of the population-kind of Chinese model.
 
Cash in circulation is only 3-4% of all money in the system, in almost every country. Money on gyro, current and other accounts is around 97%, in form of digital/bank record, and that has been for decades.
This is what I wrote previously.
A disparity exists between the two. In the case of digital payments or transactions using various eWallets for instance that have been in use for a considerable period, there is a tangible connection to physical printed banknotes and their corresponding background. In contrast, digital rupiah completely eliminates the necessity for physical printed IDR banknotes.

Without the introduction of Central Bank Digital Currency (CBDC), in this case digital rupiah, traditional practices like printing banknotes and minting coins would still be necessary.
 
97% of the existing money is digital already. The "physical" money (coins and notes) represents only 3%.
That is exactly the reason for, in this case, a digital Rupiah.

The commercial banks having to much power with their digital (commercial) money. Also when these banks go bankrupt, people lose their money, there will be bank runs and chaos and the government has to bail the banks out.

Not with e-Rupiah (digital Rupiah), issued by the Indonesian central bank. It represent the national currency, like the physical banknotes and coins.
 
Last edited:
This is what I wrote previously.
A disparity exists between the two. In the case of digital payments or transactions using various eWallets for instance that have been in use for a considerable period, there is a tangible connection to physical printed banknotes and their corresponding background. In contrast, digital rupiah completely eliminates the necessity for physical printed IDR banknotes.

Without the introduction of Central Bank Digital Currency (CBDC), in this case digital rupiah, traditional practices like printing banknotes and minting coins would still be necessary.
payments to e-wallets are coming from bank accounts mostly. I do not nobody who tops e-wallet with physical cash.
 
It is a slow day in a little Greek village. The rain is beating down and the streets are deserted.

Times are tough: everybody is in debt, and everybody lives on credit.

On this particular day a rich German tourist is driving through the village, stops at the local hotel and lays a €100 note on the desk, telling the hotel owner he wants to inspect the rooms upstairs in order to pick one to spend the night.

The owner gives him some keys and, as soon as the visitor has walked upstairs, the hotelier grabs the €100 note and runs next door to pay his debt to the butcher.

The butcher takes the €100 note and runs down the street to repay his debt to the pig farmer.

The pig farmer takes the €100 note and heads off to pay his bill at the supplier of feed and fuel.

The guy at the Farmers’ Co-op takes the €100 note and runs to pay his drinks bill at the taverna.

The publican slips the money along to the local prostitute drinking at the bar, who has also been facing hard times and has had to offer him “services” on credit.

The hooker then rushes to the hotel and pays off her room bill to the hotel owner with the €100 note.

The hotel proprietor then places the €100 note back on the counter so the rich traveller will not suspect anything.

At that moment the traveller comes down the stairs, picks up the €100 note, states that the rooms are not satisfactory,
pockets the money, and leaves town.

No one produced anything, no one earned anything.

However, the whole village is now out of debt and looking to the future with a lot more optimism.
This video is the same 'script' as above. More funny!

 
Unless the government pursues a rigorous and publicly transparent process in creating digital currency it would be very easy to be tempted to enable large government projects by creating extra digital currency. Simplistically it is can be a useful tool but fraught with serious danger if not done extremely carefully. If there were later a loss of public confidence this would also impact the value of the rupiah and again with potentially serious consequences.
1703641603682.png
 
it would be very easy to be tempted to enable large government projects by creating extra digital currency
That is already happening in the current situation, creating money by issuing government bonds, making the national debt bigger. Or when the central bank buys up company bonds. It's complicated. The commercial banks are the ones who actually creating money by lending people money. When you want to buy a car and you take a bankloan to pay for the car. That's when the bank created money.
 
Last edited:
When you mentioned that 97% of the current money is already digital, I'm uncertain whether you grasp the distinction between digital transactions involving money or currency and the forthcoming concept of digital rupiah set to be introduced in 2024.

A disparity exists between the two. In the case of digital payments or transactions using various eWallets for instance that have been in use for a considerable period, there is a tangible connection to physical printed banknotes and their corresponding background. In contrast, digital rupiah completely eliminates the necessity for physical printed IDR banknotes. It proves more efficient for the central bank since there's no need for paper and coin production. For individuals, it eliminates the necessity to carry cash or maintain a physical money box for savings, and it also facilitates easier transaction tracking.

Digital rupiah is categorized the so called the Central Bank Digital Currency (CBDC). Because it is issued by the central government, and its value relies on the trust and confidence people have in the government, it maintains its classification as a fiat currency.

It's important to highlight that, as of now, the UK government has not introduced any digital version of the GBP.
Going all digital is what all governments want as it will give them a 100% control of YOUR money.
Hence most people are against it.
If we went all digital (and various countries taking steps in that direction, China, Indonesia etcc) the government can block, suppress, reduce, render invalid all your money without you having even a chance to an alternative solution like stacks of $ under your matress.

Think about all the oligarch or millionaires who had their accounts blocked. The rebellious truckers in Canada being an example...The Cyprus crisis...
At the moment, we still have the possibility to witdraw our money from our account when our salary / pension arrives and keep it in a cookie jar at home.
Of course the government can overnight declares all actual the bank notes invalid (think India)
 
OK, a tourist walks up to an ATM to take out some cash. What are they going to get?
 
Going all digital is what all governments want as it will give them a 100% control of YOUR money.
Hence most people are against it.
If we went all digital (and various countries taking steps in that direction, China, Indonesia etcc) the government can block, suppress, reduce, render invalid all your money without you having even a chance to an alternative solution like stacks of $ under your matress.

Think about all the oligarch or millionaires who had their accounts blocked. The rebellious truckers in Canada being an example...The Cyprus crisis...
At the moment, we still have the possibility to witdraw our money from our account when our salary / pension arrives and keep it in a cookie jar at home.
Of course the government can overnight declares all actual the bank notes invalid (think India)
And they're also able to see what you buy, where, and when.
 
Money launderers, drug barons, regardless of their actions or electronic transfers, ultimately require physical assets like banknotes, gold at the end to eliminate traces.

The renowned Netflix documentary, "Billion Dollars Heist," highlights a team of highly proficient individuals specializing in cyber crime, banking and money transfers. The narrative unfolds the story of the most audacious cyber heist in history; the theft from the Bangladeshi Central Bank. This feature documentary look into the evolution of cybercrime, progressing from basic credit card fraud to the intricate criminal organizations prevalent today. It's enjoyable to watch for both entertainment and educational purposes.

Despite their expertise in cyber crime, digital and electronic money transfers, the documentary emphasizes that, ultimately, these individuals need to resort to using unregulated casinos in the Philippines to withdraw the money, get a pile up of banknotes and cover their tracks. Using Central Bank Digital Currency (CBDC) distinct from cryptocurrencies, makes it more challenging for them to accomplish that.
 
Last edited:
Going all digital is what all governments want as it will give them a 100% control of YOUR money.
Hence most people are against it.
If we went all digital (and various countries taking steps in that direction, China, Indonesia etcc) the government can block, suppress, reduce, render invalid all your money without you having even a chance to an alternative solution like stacks of $ under your matress.

Think about all the oligarch or millionaires who had their accounts blocked. The rebellious truckers in Canada being an example...The Cyprus crisis...
At the moment, we still have the possibility to witdraw our money from our account when our salary / pension arrives and keep it in a cookie jar at home.
Of course the government can overnight declares all actual the bank notes invalid (think India)
The US government already does that to certain people. They don't need to prove you did anything or even file criminal charges. Imagine that amplified by 1,000.


 
Screwed on the exchange rate?

Certainly. Both Central Bank Digital Currency CBDC (e.g digital IDR) and Traditional bank notes/coins are Fiat Currency.

In a fiat currency system, governments still have the authority to undertake currency stabilization measures such as devaluation, re-denomination, or 'sanering.'(adjusting nominal value).
 
Not fiat the car? Reliable and cheap lol
Dubai gonna launch the bugatti e-coin soon then
Your money goes so fast in Dubai

Hhhmmm wonder how much brunch costs there?!
 

Users who viewed this discussion (Total:0)

Follow Us

Latest Expat Indo Articles

Latest Tweets by Expat Indo

Online Now

No members online now.

Forum Statistics

Threads
6,288
Messages
104,993
Members
3,560
Latest member
André
Back
Top Bottom