THECRYPTO.WATCH – A new era in the financial system is slowly emerging with the rise of digital currency. Be prepared to replace all your currency.
The popularity of crypto is increasing. Therefore, Bank Indonesia is currently working on the creation of digital currency Central Bank Digital Currency. which will be referred to as digital rupiah.
What does digital currency mean?
Digital currency means cryptographic-based rupiah currency, which will later be known as digital rupiah. This currency will be decentralized and will not need a central bank for its transaction traffic, but it’s done directly.
Examples of cryptocurrencies are Bitcoin, Litecoin, Peercoin. However, they are not recognized as legal currency in many countries, including Indonesia. Therefore, it cannot be used to make any transactions.
Therefore, Bank Indonesia in CBDC makes digital rupiah which will be formulated the same as crypto currency.
The Difference Between Digital Rupiah and Cryptocurrency.
Digital rupiah has a fairly basic difference with cryptocurrencies. If crypto is not controlled by a central bank, it is different from digital rupiah. Because it can be used to make transactions.
CBDC will later become digital money whose issuance and control will still be carried out by the Indonesian central bank, BI. Therefore, this currency can be used as a legal tender to replace currency that is already circulating in the public.
The reason is, cryptocurrencies are vulnerable to fraud and cannot be recorded in the financial system. Thus, the use of crypto currency will be detrimental to the state in terms of tax deposits.
The price of crypto currency is also controlled by the market so that it fluctuates. The movement is based on a supply and demand system, as well as the existence of cryptocurrencies that can be exchanged for digital assets.
Meanwhile, digital rupiah is digital money that will be controlled by the Central Bank or BI. It can be used as a legal transaction tool and is the obligation of the central bank to everyone who holds it.
Because it has such characteristics, the digital rupiah fulfills the requirements of the definition as a financial instrument and can be recorded as part of cash.
Digital currency, which will later have a formula like cryptocurrency. The difference is, it can be used as a substitute for fiat money. It is better if people are prepared to wait for this new era.