CBDC with Stablecoin Mechanics: Indonesia’s Digital Rupiah to Be Backed by Government Bonds

Bank Indonesia (BI) is advancing its central bank digital currency (CBDC) project with a new model that integrates stablecoin mechanics, making the upcoming digital rupiah one of the world’s first sovereign digital currencies backed by government ￰2￱ initiative, announced by BI Governor Perry Warjiyo at the Indonesia Digital Finance and Economy Festival and Fintech Summit 2025 in Jakarta, represents a major step in the nation’s financial digitalization under Project ￰3￱ Government Bonds Make a CBDC Truly Stable? Indonesia Thinks So BI Governor Perry Warjiyo at the Opening Ceremony FEKDI x IFSE 2025). “We will issue Bank Indonesia ￰4￱ have a digital version, a digital Bank Indonesia rupiah with underlying government bonds, and a national Indonesian stablecoin version,” he ￰5￱ approach effectively combines the security of a central bank-issued currency with the stability of an asset-backed digital token, creating what BI officials describe as a “national stablecoin.” The model ties the value of the digital rupiah directly to government bonds through tokenization, ensuring that each unit of digital currency is underpinned by a tangible, stable ￰6￱ Indonesia’s new framework aligns with its broader digital finance agenda, which focuses on expanding innovation and acceptance, strengthening industrial structures, and maintaining financial ￰7￱ move also builds on the success of the Project Garuda proof-of-concept completed in December 2024 , which tested distributed ledger technology (DLT) platforms such as Corda and Hyperledger Besu for digital currency issuance, redemption, and fund ￰8￱ Indonesia has successfully completed the first phase of its digital Rupiah project #DigitalRupiah #Indonesia ￰0￱ — ￰9￱ (@cryptonews) December 16, 2024 Under the bond-backed design, BI will tokenize government bonds to issue digital securities built atop the CBDC ￰10￱ system aims to enhance market liquidity by making bond settlement faster and more transparent while reducing transaction costs through blockchain-based ￰11￱ differentiates Indonesia’s CBDC With Stablecoin Twist From Private Stablecoins Indonesia’s central bank says the hybrid CBDC will provide multiple advantages, including greater monetary policy control, improved payment efficiency, and enhanced ￰12￱ private stablecoins, which carry credit and issuer risks, the digital rupiah will be a direct liability of the central ￰13￱ believe this structure will reinforce public trust while offering faster, cheaper, and more programmable payments domestically and ￰14￱ central bank’s plan to issue a bond-backed CBDC could help counter the growing influence of private digital currencies while preserving national monetary ￰15￱ Project Garuda, BI aims to provide a safer, government-backed alternative to privately issued stablecoins, offering price stability, regulatory oversight, and financial inclusion.

Notably, the rollout will occur in phases, starting with a wholesale digital rupiah for interbank transfers before expanding to a retail version for the ￰16￱ Indonesia’s Digital Rupiah Project Enters New Stage Amid Rapid Crypto Expansion Nationwide Deputy Governor Juda Agung previously stated that findings from the proof-of-concept will form the foundation for the next development phase, focusing on scalability and operational ￰17￱ project’s design emphasizes interoperability across digital platforms, ensuring that the digital rupiah can integrate seamlessly with existing payment systems and international standards such as ISO 20022. Indonesia’s approach stands out ￰18￱ China’s e-CNY focuses on retail use and state control, and the Bahamas’ Sand Dollar targets financial inclusion, Indonesia’s model blends both elements, central trust and asset-backed ￰19￱ Singapore’s Project Orchid or Hong Kong’s e-HKD , which prioritize programmability and private collaboration, Indonesia’s CBDC directly incorporates stablecoin-style asset backing to ensure long-term ￰20￱ policy innovation, the digital rupiah comes amid rapid growth in Indonesia’s crypto sector.

Indonesia's crypto market is booming! With over $30 billion in transactions and 21 million traders in 2024, the country is solidifying its status among the global crypto leaders. #Indonesia #Crypto ￰1￱ — ￰21￱ (@cryptonews) November 29, 2024 The country recorded over 475 trillion rupiah (around $30 billion) in crypto transactions by late 2024, a 352% increase from the previous year, with more than 21 million traders now ￰22￱ to a study by the University of Indonesia, the crypto industry contributed $4.4 billion to GDP in 2024 and generated over 333,000 jobs.