Bank Indonesia (BI), the central bank, plans to issue a “national stablecoin” version of the Rupiah, uniquely backed by Government Bonds (SBN).
Bank Indonesia (BI) is advancing plans to issue a national stablecoin now. The government bonds (SBN) will actively support this digital currency. Thus, the project is geared towards revolutionizing the financial system of Indonesia. This is a significant digital finance breakthrough in general. The switch incorporates blockchain technology to ensure stability.
Central Bank Digital Rupiah to Anchor New Digital Asset
Central bank Governor Perry Warjiyo initiated the scheme on Thursday. Specifically, it was the announcement made actively during the Indonesia Digital Finance and Economy Festival. So that attests to the strategic significance of the launch. The new stablecoin is a vital part of a larger digital strategy.
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Governor Warjiyo has confirmed that BI securities would now be issued. He referred to it as a digital Bank Indonesia Rupiah with underlying SBN. Moreover, he described it as the stablecoin counterpart of the national currency of Indonesia. This hybrid identity combines analogue and digital assets.
The stablecoin will have its immediate equivalent in a tokenized SBN. It will be developed on the country’s CBDC framework, called the Digital Rupiah. The CBDC infrastructure is a part of the ongoing Garuda Project successfully. Hence, the project utilizes existing digital government foundations.
The central bank will now give priority to three pillars of digital finance. First, active acceptance and innovation must be expanded. Second, improving the industry structure is one of the key objectives. Finally, it is of most importance to keep the industry stable. This holistic approach will help you grow in the long run.
At present, the asset is backed up and thus is stable. A stablecoin is backed by a fiat currency, such as the U.S. dollar. Unlike Bitcoin or Ethereum, its value is stable. Therefore, the price often moves very close to its benchmark value.
OJK Monitors and Regulates Existing Stablecoin Market
The OJK had earlier started pointing out the use of stablecoins. Although they are not legal tender yet they are used for a large utility purpose. In fact, they have a large amount of transactions in the market. This points to the current need for stability in the digital world.
Dino Milano Siregar, OJK, confirmed the active supervision at the moment. He explained that the OJK has stablecoins in the exchange surveillance regime. Additionally, the supervision is offered to every crypto trader at all times. This regulatory oversight ensures market integrity and adherence to regulations.
Importantly, OJK rules also apply immediately to anti-money laundering principles. Additionally, there is also a reporting requirement for crypto traders, and they tend to be required to make regular reports on an ongoing basis. This ordered rule has the effect of reducing systemic risk efficiently. Therefore, the market is functioning with definite rules.
Besides that, Mr. Siregar added that stablecoins are now used as a hedging instrument. Although they are not ratified as payment, their market value is obvious. More specifically, stablecoins that have credible backing assets are already traded. This reflects their already existing role in finance.
The stability is provided to a great extent by the support of government bonds (SBN). This is reassuring and encourages active investment growth. As a result, the stablecoin is as stable and credible as one can imagine. This feature is critical for institutional trust.
In the end, Bank Indonesia is a strong supporter of financial innovation. The SBN-backed stablecoin is a well-thought-out strategic move at this point in time. With such development, the whole national payment system will be successfully modernized. Thus, Indonesia takes the next step towards its digital future.
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