Project Garuda takes flight: First phase of Indonesia’s Digital Rupiah achieved

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As a researcher with a keen interest in the intersection of technology and finance, I find this development by Bank Indonesia truly fascinating. With my background in economics and blockchain technology, I have closely followed the global race to develop Central Bank Digital Currencies (CBDCs). The completion of the Proof of Concept (PoC) for the Wholesale Rupiah Digital Cash Ledger is a significant milestone not only for Indonesia but also for the broader digital finance landscape.

Indonesia’s central bank, Bank Indonesia, has finished testing a digital ledger system for wholesale Rupiah digital cash, known as Proof of Concept (PoC).

This project, named Garuda, is driving forward the progress of our nation’s Central Bank Digital Currency (CBDC) development.

Perry Warjiyo, the head of Bank Indonesia, declared that they have concluded the initial stage, referred to as “Immediate State,” which marks the beginning of the digital Rupiah expedition’s progression.

The development aligns with the bank’s mandate as Indonesia’s sole currency issuer and responds to the rapid growth of the digital financial economy.

Warjiyo emphasized in the official document that this accomplishment underscores Bank Indonesia’s dedication towards fostering the Rupiah Digital, which is a reaction to the swift expansion of the digital financial market.

As per Fransiskus Xaverius Tyas Prasaja, an economist from Bank Indonesia, the Proof of Concept (PoC) confirmed that the necessary technical abilities could be validated through Distributed Ledger Technology (DLT). The testing stage demonstrated that DLT-based solutions were capable of efficiently addressing the requirements set by the Digital Rupiah business model.

The technical implementation involved testing across two DLT platforms: Corda, developed by R3, and Hyperledger Besu, developed by Kaleido. Both platforms were tested through 55 scenarios, focusing on three core business processes: issuance, redemption, and fund transfer.

The PoC revealed that the DLT platforms successfully integrated with conventional systems using existing standards and the ISO 20022 standard. Smart contracts showed better transaction efficiency and flexibility for future Rupiah Digital development.

According to the whitepaper from the central bank, titled “Project Garuda: Designing the Digital Rupiah Infrastructure,” there are two upcoming stages – the Intermediate Stage and Final Stage – outlined in Indonesia’s plan for developing its Central Bank Digital Currency (CBDC). Completing this preliminary phase places Indonesia amongst an increasing group of countries actively pushing forward with their digital currency projects.

Bank Indonesia underscores that the Digital Rupiah is designed to align seamlessly with current payment platforms and financial markets’ underlying framework, facilitating both local and international transactions.

As a crypto investor, I’m thrilled about the promising outcomes from the Proof of Concept (PoC), which have pinpointed essential aspects for deeper investigation. These areas include enhancing privacy features, refining liquidity management protocols, and strategizing multi-validator deployment methods. This development signifies a significant milestone in Indonesia’s progress towards strengthening its digital financial infrastructure.

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2024-12-15 17:10