Blockchain technology and cryptocurrencies have had a storied history in Indonesia. When first introduced, they were viewed as disruptors to the existing financial order, owed in no small part to the fact that transactions involving cryptocurrencies removed the need for intermediary roles that were traditionally filled by banks and other financial institutions.
But according to regional tech-driven media outlet The ASEAN Post, Indonesia has since been at the forefront of blockchain in several ways, reporting that it was the first country in the region to actively adopt the technology. In January of last year, Bank Indonesia (BI) announced plans to launch its own blockchain-based digital rupiah currency. Its issuance by the central bank differentiates it from cryptocurrencies, which are decentralized.
The more accommodating stance taken by BI towards blockchain has encouraged other domestic institutions to explore possibilities with the technology. Five major banks, comprising Bank Negara Indonesia, Bank Rakyat Indonesia, Bank Mandiri, Bank Danamon and Bank Permata, are studying avenues for blockchain adoption.
Indonesia is currently ranked 14th in the world for receipts of migrant remittances, according to the World Bank, with the amount sent home from those working abroad totaling an estimated US$10.5 billion. Through the adoption of blockchain, the country’s share of remittance revenue could grow substantially as the technology removes the need for intermediaries, thereby streamlining transactions and reducing costs.
Given the country’s many small businesses, the implementation of blockchain has the potential to enhance the sector by providing a more affordable and less bureaucratic alternative to the deployment of costly digital payment mechanisms.
With the backing of the central bank, more blockchain-specific firms and initiatives are expected to be established going forward, as Indonesia increasingly embraces the technology.
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Asia Blockchain Review is the largest initiative for media and community building in Asia for blockchain technology. It aims to connect all blockchain enthusiasts on a regional scale and facilitate the technological foundation of blockchain through a range of group discussions, technical workshops, conferences, and consulting programs.
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