Earlier in 2020, BAPPEBTI determined 229 types of crypto-assets that can be traded in the physical crypto-asset market in Indonesia by the 13 crypto-asset traders, who are authorized and received registration certificates from BAPPEBTI. These types of crypto-assets are not legal tender and are not backed by any government or public authority. 7 Year 2020 regarding the determination of the list of crypto-assets allowed to trade in crypto-assets physical market ("BAPPEBTI Regulation 7/2020");.
8 Year 2021 on the technical conditions of the physical market for crypto-assets on the futures exchange (BAPPEBTI Regulation 8/2021). Mechanism for adding and removing Crypto-Asset types and the list of Crypto-Assets tradable on the physical Crypto-Asset market; and C. 7 of 2020 on the list of crypto-assets that may be traded on the physical market for crypto-assets (hereinafter BAPPEBTI Regulation 7/2020).
The 229 types of crypto-assets that can be traded on the physical crypto-asset market in Indonesia are regulated in the Appendix II of BAPPEBTI Regulation 7/2020 as follows:32. 59 Karmila Sari Sukarno and Pujiyono, "The use of cryptocurrency as a payment instrument," in 3rd International Conference on Law and Governance (ICLAVE 2019), ed.
B. Advantages and Disadvantages of Cryptocurrency
There are also countries that have banned cryptocurrency as a means of payment, but have allowed its use as a commodity in the form of digital assets. Singapore has declared that cryptocurrency is legally traded as a commodity and is therefore also subject to capital gains taxation.63 Cryptocurrency is classified as an asset of fixed value and is exchangeable for fiat money according to a process set by the Monetary Authority. of Singapore (MAS).64 The operation of cryptocurrency in Singapore is restricted and its use as a payment instrument is strictly prohibited.65. Some countries have banned the use of cryptocurrency as a means of payment as they develop their own central bank digital currency (CBDC).
For example, money transfers to and from overseas accounts must be done on business days and hours through traditional payment systems. Protection of personal data is very important as it is not uncommon in Indonesia for the information about personal data to be leaked and even sold on the black market. If Cryptocurrency is used as a means of payment, the potential for personal data breaches is very small due to the blockchain system.
Cryptocurrency value is very volatile, so the movement of cryptocurrency rates cannot be controlled by the government, unlike the Rupiah, whose exchange rate is quite stable and can be influenced by the government. Furthermore, Cryptocurrency is also a new currency and has only been active for about 10 (ten) years. Furthermore, if Cryptocurrency is used as legal tender, it will affect the operational activities (daily) of conventional banks.
If cryptocurrency is authorized as legal tender, the potential for crimes in the financial sector will also increase, including money laundering, terrorism and other financial crimes. The effect of cryptocurrency when used as legal tender Acceptance of cryptocurrency as legal tender will have several effects on monetary.
C. The Effect of Cryptocurrency When Used as a Legal Tender Accepting Cryptocurrency as legal tender will have several effects on monetary
Cryptocurrency transactions use a peer-to-peer system, so no third party, in this case a bank, is required to transact. If people use Cryptocurrency and start to leave the bank when making transactions, it is very likely that conventional banks will collapse (go bankrupt) over time. These crimes are difficult to trace because the transactions are performed peer-to-peer (decentralized) and untraceable, unlike transactions through banks, where the money flow can be tracked/traceable.
The monetary authority has the power to influence the exchange rate of the rupiah and the circulation of money (the rupiah) in Indonesia. BI plays a very important role in determining the payment system (especially the rupiah), exchange rates, money circulation, inflation and other policies related to the rupiah. If Cryptocurrency is used as legal tender, BI as the central bank loses its power of influence over these matters.
This is because its prices are very volatile and cannot be controlled by monetary policy, as they are highly dependent on market conditions (supply and demand). BI does not want to lose its authority on this matter, its concern is that the country's economy will collapse, causing chaos and possible crises.
THE BANK OF INDONESIA’S NATIONAL AGENDA TOWARD CRYPTO-ASSETS
A. Central Bank Response toward Crypto-Asset
Development of Central Bank Digital Currency (CBDC) To prevent the use of cryptocurrency in the world, many countries are clinging.
B. The Development of Central Bank Digital Currency (CBDC) To counter the usage of Cryptocurrency in the world, many countries embrace
From the table above, it can be concluded that Indonesia is in the middle of the research phase of CBDC development. This is in line with BI's own statement that Indonesia has taken some preliminary steps to develop CBDC.76 However, BI has yet to set a timeline for CBDC implementation. CBDC is simply a digital version of the rupee, which is still considered a rupee under existing laws and is permitted to be used as a legal tender, unlike any current form of cryptocurrency.79.
The Bahamas is the first country to implement it in October 2020 with its currency, the Sand Dollar.80 The Eastern Caribbean Islands implemented CBDC through Eastern Caribbean Central Bank (ECCB) with its currency DCash in April 2021.81 The digital currency is the valid payment instrument in many countries in the area. In Europe, Sweden has entered the trial stage of the CBDC implementation with its currency, E-krona.82. UNDP cited, the latter benefit can be earned if CBDC is implemented globally in many countries.
80 Vipin Bharathan, "Central Bank Digital Currency: World's First Nationwide CBDC Launched by Bahamas," Forbes, 2020, accessed November 3, 2021, https://www.forbes. To date, there are two different models of CBDC, retail and wholesale.84 Retail CBDC is the model where it can be used by the public, especially individuals,85 while wholesale CBDC is the model where it is intended for financial use only. institutions and their activities in relation to the central bank.86 In addition, CBDC designs are also influenced by each country's policies. In terms of CBDC's ability to provide anonymity, it can be divided between account-based and token-based.
For an account-based CBDC, a central bank maintains a central ledger for settlement, while settlement in a token-based CBDC can be centralized or decentralized. Its value is not only affected by the demand and supply of people, which will affect greater price stability.
C. The Implementation of Indonesia’s CBDC
Following the example of E-CNY, Indonesia's CBDC ("Digital the Rupiah") could work similarly if fully implemented in the country. Digital The Rupiah will be another form of fiat currency issued by Central Digital. The Rupiah will have all the basic functions of money (unit of account, bank draft and store of value). The issuance of digital Rupiah is in fact the issuance of another form of The Rupiah, as a result of digital innovation towards legal tender.
The issuance and circulation of the digital Rupiah will be identical to the physical Rupiah, while the value of the physical Rupiah will be transferred to a digital form. This governance means that the issuance of the digital Rupiah will be fully authorized by BI. Commercial banks and other authorized institutions will play the role of exchanging and circulating digital Rupiah in the public, similar to the working method of the physical Rupiah.
Digitally the Rupiah will act as a substitute and co-exist with traditional money (physically The Rupiah). However, it will not completely replace the physical rupiah as it has its own role and needs in the national payment system. Therefore, if BI starts issuing the Rupiah digitally, it will not stop issuing the physical Rupiah either.
Digital Rupiah will function and circulate digitally through the app or e-wallet/account, hence its ability to facilitate digital transaction. Therefore, if the issuance of digital Rupiah is intended to be an alternative to cryptocurrency, then it should be issued in retail form.
CONCLUDING REMARKS
When fully operational, Indonesia's Digital Rupiah will be the answer to how the nation can revamp its payment systems amid the advancing digital age, while at the same time avoiding the use of cryptocurrency as a legal instrument of payment, in compliance with the ban. made by BI. On the other hand, the implementation of Digital Rupiah will not work in the same way as Bitcoin in El Salvador. The legalization of Bitcoin as legal tender in El Salvador is a policy that directly legalized the original form of cryptocurrency as a payment instrument.
Compared to digital Rupiah, digital Rupiah is basically a legal tender (The Rupiah) but in a digital form. Therefore, its use as a payment instrument is fully supervised by the government, which, as we discussed before, plays an important aspect in making a complete payment instrument. The reasons behind this rejection are; (a) Cryptocurrency violates Money Law and other related BI regulations, which stated that The Rupiah is the only legal instrument of payment in Indonesia's jurisdiction, and (b) Cryptocurrency has the potential to facilitate various crimes, including but not limited to money laundering and terrorism funding.
CBDC is said to be safer and have a more stable price compared to Cryptocurrency, which can help it be a more complete payment tool in the digital age. The purpose of this action is to prevent Cryptocurrency from being misused as a payment instrument in the future, and/or to prevent the development of any unsupervised transaction that uses Cryptocurrency as a payment instrument. Furthermore, it is important for BI to specifically regulate the procedure in the near future with the aim of preventing and sanctioning any parties who misuse Cryptocurrency as a payment instrument.
Central Bank digital currency: The first country-wide CBDC in the world has been launched by the Bahamas. Forbes, 2020. The Use of Cryptocurrency as a Payment Instrument.” In 3rd International Conference on Law and Governance (ICLAVE 2019), edited by Heru Susetyo.
