D3 Labs, a leading blockchain technology company, has announced a strategic partnership with the Indonesian Blockchain Association (IBA), a non-profit organization that promotes the adoption and innovation of blockchain in Indonesia. The partnership aims to accelerate the development of a digital rupiah, a sovereign digital currency that will enhance the efficiency and inclusiveness of the Indonesian financial system.
The digital rupiah project is aligned with the vision of Bank Indonesia, the central bank of Indonesia, which has been exploring the feasibility and potential benefits of issuing a central bank digital currency (CBDC). A CBDC is a digital form of fiat money that is issued and regulated by the central bank. It can offer advantages such as lower transaction costs, faster settlement, greater financial inclusion, and improved monetary policy effectiveness.
D3 Labs and IBA will leverage their respective expertise and networks to support the design, implementation, and testing of the digital rupiah. D3 Labs will provide its blockchain platform and solutions, which are based on advanced cryptography, distributed ledger technology, and smart contracts. IBA will facilitate the collaboration and coordination with relevant stakeholders, such as regulators, financial institutions, industry associations, and academia.
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The partnership will also involve conducting research and education activities to raise awareness and understanding of the digital rupiah among the public and private sectors. The partners will organize workshops, seminars, webinars, and publications to disseminate knowledge and best practices on CBDCs and blockchain technology.
Indonesia is one of the countries that has recognized the potential of blockchain and cryptocurrency as a new technology and a trading commodity. However, the legal status of cryptocurrency in Indonesia is not without challenges and uncertainties. According to the constitution of Indonesia, the only legal currency in the country is the Rupiah, and all transactions within the country must be conducted in Rupiah, except for some exceptions such as international transactions, government spending, and bank deposits. Therefore, cryptocurrency cannot be used as a form of payment in Indonesia, and banks are prohibited from facilitating such transactions.
However, cryptocurrency can be traded as a commodity on futures exchanges, as long as it meets certain criteria and regulations. The Ministry of Trade legalized cryptocurrency trading in September 2018, and the Futures Exchange Supervisory Board (Bappebti) issued a comprehensive regulatory framework for crypto assets in 2019. Bappebti also compiled a list of 229 crypto assets that can be legally traded on futures exchanges in Indonesia.
D3 Labs and IBA believe that the digital rupiah will be a game-changer for the Indonesian economy, as it will enable more efficient, secure, transparent, and inclusive financial transactions. The partners are committed to working together to make the digital rupiah a reality and to contribute to the digital transformation of Indonesia. A CBDC is a digital form of fiat money that is issued and regulated by the central bank. It can offer advantages such as:
Lower transaction costs: A CBDC can reduce the intermediaries and fees involved in transferring money, especially across borders.
Faster settlement: A CBDC can enable instant and final settlement of payments, without relying on third-party clearing houses or payment processors.
Greater financial inclusion: A CBDC can reach the unbanked and underbanked population, who may not have access to traditional financial services or digital payment platforms.
Improved monetary policy effectiveness: A CBDC can enhance the transmission and implementation of monetary policy, as it can provide more accurate and timely data on money supply and demand.
D3 Labs will provide its blockchain platform and solutions, which are based on advanced cryptography, distributed ledger technology, and smart contracts. IBA will facilitate the collaboration and coordination with relevant stakeholders, such as regulators, financial institutions, industry associations, and academia.
D3 Labs and IBA believe that the digital rupiah will be a game-changer for the Indonesian economy, as it will enable more efficient, secure, transparent, and inclusive financial transactions. The partners are committed to working together to make the digital rupiah a reality and to contribute to the digital transformation of Indonesia.