INDONESIA Trends and Developments Contributed by: Vik Tang, Michelle Virgiany, Novita Wulandari and Fransiska Larasati, Hiswara Bunjamin & Tandjung
• fund sources in the form of savings and credit facilities; • payment instruments in the form of debit and credit cards and server-based electronic money; and/or • electronic services that enable data storage of fund sources and/or payment instruments. Following the issuance of the QRIS Regulation, there have been indications that the Merchant Discount Rate (MDR) will be lowered (from 0.4% to 0%) for public services mandated by the gov - ernment, commencing on 14 March 2025. BI also updated the anti-money laundering (AML) and counter-terrorism financing (CTF) framework, noting that the last major update was back in 2017. The issuance of PBI 10/2024 not only strengthens AML and CTF measures but also emphasises prevention of financing the proliferation of weapons of mass destruction. PBI 10/2024 also covers other critical areas, such as the application of these principles to business groups (including domestic and foreign subsidiaries and/or branches) and the suspen - sion of transactions for suspicious activities. Over the past few years, digitalisation has sig - nificantly driven the growth of digital finance in Indonesia, while also increasing exposure to cyber-risks that could lead to financial losses and threaten the stability of the financial system. Fol - lowing several suspected ransomware attacks on banks, the Financial Services Omnibus Law authorised BI to oversee the implementation of security measures and ensure the reliability of information systems, including cyber-resilience. Cyber stability is a key focus for Indonesia’s pay - ment system transformation, as explained in BI’s 2030 Payment System Blueprint. PBI 2/2024 introduces a new regulatory framework for gov - ernance, prevention, management, monitoring
and collaboration on cybersecurity within the digital payment system. Another area under development by BI is the exploration of Indonesia’s Central Bank Digi - tal Currency (CBDC), known as Digital Rupiah. There will be two forms of Digital Rupiah: • wholesale Digital Rupiah ( “w-Digital Rupiah” ) and • retail Digital Rupiah ( “r-Digital Rupiah” ). Digital Rupiah is one of the five initiatives out - lined in BI’s 2030 Payment System Blueprint under Project Garuda. The implementation of Project Garuda has three stages: immediate, intermediate and end state. In 2024, BI completed the immediate stage, which involved the issuance, redemption and remittance of the w-Digital Rupiah cash ledger. Throughout this process, BI identified various use-case scenarios along with their potential economic benefits. Over the next five years, as it enters the sec - ond, intermediate stage, BI will experiment with Digital Rupiah to support money market transac - tions, dividing the measures into three phases: • first phase (2025–2026) – exploration of use cases for issuance, remittance and redemp - tion of securities ledgers; • second phase (2027–2028) – expansion to include monetary operations and transactions in the money market; and • third phase (2029–2030) – utilisation of pro - grammability, composability and tokenisation capabilities within the money market. At present, these explorations are limited to domestic transactions, but BI aims to ultimately
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