Bank Of Indonesia’s Executive Director Says The CBDC Is A Weapon Against Bitcoin
Per the Central Bank of Indonesia, Central Bank Digital Currencies (CBDC), which are digital equivalents of national reserve currencies that were established in response to increased virtual currency usage, would be a key instrument in the fight against digital currencies.
In a recent statement, Central Bank of Indonesia associate governor Juda Agung stated that the bank is contemplating introducing a digital currency to “combat” digital currencies such as Bitcoin (BTC).
Agung made the statement during a recent legislative hearing. According to a story published on Tuesday by Bloomberg, Agung claimed that a CBDC would be one of the weapons used to combat cryptocurrency.
Furthermore, they believe that CBDC will be perceived as more credible than cryptocurrencies. CBDC would be a part of a larger effort to tackle the use of cryptocurrency in monetary operations, which would include other organizations.
Crypto Seen As Haram
Although cryptocurrencies such as Bitcoin have had significant consequences for the monetary sector, according to Juda Agung, they are now traded alongside commodities contracts and controlled by the trade ministry.
The announcement comes only days after the National Ulema Council (MUI), Indonesia’s highest Islamic academic organization, apparently declared cryptocurrencies such as Bitcoin to be haram, or outlawed, under Islamic law, according to local media reports.
Subsequently, in late October, the East Java chapter of one of the MUI’s sister organizations published a statement declaring the usage of cryptocurrencies to be haram.
According to prior reports, Indonesia’s authorities have maintained a conflicted stance on cryptocurrency legislation.
Despite the fact that local authorities banned Bitcoin payments back in 2017, they have chosen to make cryptocurrency trading lawful.
Uptake Of CBDCs By Monetary Authorities
Commodity Futures Trading Regulatory Agency (Ministry of Trading) in Indonesia, according to reports, wants to create a government-backed cryptocurrency exchange in the second part of 2021 in April 2021.
Indonesian policymakers have been progressively considering the establishment of a CBDC, although they retain a mixed attitude on cryptocurrency.
Perry Warjiyo, the director of Indonesia’s central bank, revealed intentions to introduce a digital Rupiah as a legitimate payment tool in the country earlier this year.
According to reports, CBDCs, such as the Chinese digital Yuan, are believed to be intended to discourage cryptocurrency uptake as one of their primary characteristics.
Indonesia is not alone in believing that CBDCs can assist governments in their efforts to battle cryptocurrency.
Elvira Nabiullina, the governor of the Bank of Russia, stated in mid-November that CBDCs should be considered as a viable alternative for governments seeking to replace autonomous cryptocurrencies such as Bitcoin.
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