Bank of Indonesia (BI) is currently refining its efforts to issue a Central Bank Digital Currency (CBDC), known as the Digital Rupiah. This initiative reflects BI’s commitment to integrating digital technology into the payment system. However, progress on issuing the Digital Rupiah appears to have stalled. Since introducing its roadmap, named Project Garuda, BI has yet to move beyond the proof-of-concept stage or conduct a pilot program.
The slow pace of development raises questions, especially considering that Project Garuda was launched in 2022, which was not included in Indonesia’s 2019-2025 Payment System Blueprint. The  initiative  originally  emerged  in  response  to  BI’s  growing  concerns  over  the  rapid expansion  of  cryptocurrencies.  Like  many  central  banks worldwide,  BI  saw  the  rise  of decentralized  cryptocurrencies—operating  outside  the  formal  financial  system—as  a potential threat to monetary policy transmission and financial stability. The introduction of the Digital Rupiah was expected to counterbalance the influence of cryptocurrencies and safeguard the financial system.
However, this sense of urgency has since diminished due to two key factors. First, BI has already prohibited the use of cryptocurrencies as a legal payment instrument in Indonesia, restricting their role to investment assets. As a result, cryptocurrencies no longer pose a direct threat to the country’s monetary system. Second, the high volatility of crypto assets has reduced their appeal, confining demand primarily to high-risk investors.
Despite the reduced risk from cryptocurrencies, BI should not delay the issuance of the Digital Rupiah.  Beyond  countering  crypto-driven  instability,  a  CBDC  offers  broader  economic benefits, particularly in enhancing cross-border transaction efficiency and deepening financial inclusion.