CBDC is a tool to combat Bitcoin, says Bank of Indonesia exec
In an interview with CNBC, Bank of Indonesia’s head of cash and securities solutions, Hadi Simanjuntak explained that cryptocurrency is a threat to the centralized banking system. He believes CBDC could be used as a tool by central banks in order to combat Bitcoin.
The “cbdc crypto” is a tool to combat Bitcoin, says Bank of Indonesia exec. The CBDC will be used by the bank to reduce the risk of digital currency and prevent money laundering.
According to the Bank of Indonesia, central bank digital currencies (CBDC), digital copies of national currencies established in response to increased cryptocurrency usage, will be a crucial weapon for countering crypto.
At a recent legislative meeting, Bank of Indonesia assistant governor Juda Agung indicated the central bank is contemplating releasing a digital rupiah to “combat” cryptocurrencies like Bitcoin (BTC).
“One of the weapons to combat crypto would be a CBDC. We believe that CBDC is more trustworthy than cryptocurrency. According to a Bloomberg story from Nov. 30, CBDC will be “part of an attempt to address the usage of cryptocurrency in financial transactions.”
Despite their catastrophic effects on the financial system, cryptocurrencies such as Bitcoin are now traded alongside commodities futures and controlled by the trade ministry, according to the source.
The announcement comes after Indonesia’s leading Islamic academic organization, the National Ulema Council (MUI), purportedly declared cryptocurrencies like Bitcoin to be haram, or prohibited, under Islamic teachings. In late October, the East Java chapter of one of MUI released a statement declaring the usage of cryptocurrencies haram.
The Indonesian government has maintained a mixed approach on cryptocurrency legislation, as previously reported. Despite the fact that municipal governments banned bitcoin payments in 2017, they have decided to keep cryptocurrency trading lawful. Indonesia’s Ministry of Trading’s Commodity Futures Trading Regulatory Agency (Bappebti) allegedly revealed intentions to build a government-backed crypto exchange in the second half of 2021 in April 2021.
While Indonesian officials have a mixed attitude about cryptocurrency, they are increasingly considering a CBDC. Governor Perry Warjiyo of the Bank of Indonesia revealed intentions to introduce a digital rupiah as a legal payment instrument in Indonesia in May.
Singapore’s CBDC, which focuses on retail, is hedging against privately minted stablecoins.
One of the primary aspects of CBDCs like the Chinese digital yuan seems to be to limit bitcoin adoption. Indonesia isn’t the only country that believes CBDCs can assist governments tackle cryptocurrency. Elvira Nabiullina, the governor of the Bank of Russia, indicated in mid-November that CBDCs may be a suitable choice for governments to replace decentralized cryptocurrencies like Bitcoin.