A. Introduction
Digitalization has implications for the disruption of the financial systems of countries around the world which encourage innovation such as the growth of Fintech companies, cryptocurrencies, and digital currencies indeed. Currently, based on Article 1 number 7 of the BAPPEBTI Regulation 5/2019, it regulated that for Indonesia, cryptocurrency is not a currency but only a digital commodity. This is inseparable from the risk of cryptocurrencies having significant fluctuations or changes in value in a short time. However, this risk does not let go of the use of cryptocurrency as a medium of exchange in the trading world. Along with its development, cryptocurrencies are overcome by solutions for the formation of digital currencies such as digital Yuan ("e-CNY") in China which are legal and recognized currencies in that country. Thus, anyone who is in China can use them as a means of payment. This digital currency is created by the central bank as a state institution in charge of regulating and managing and issuing a country's currency. The presence of this digital currency disruption prompted Bank Indonesia ("BI") as Indonesia's central bank to conduct a study and research as justification to create a Central Bank Digital Currency ("CBDC") in Indonesia. CBDC is a real form of the development of the financial and banking sector in the world, so that the legal aspect plays a very large and important role in accommodating its legitimacy and legality. Departing from this idea, the author will discuss the CBDC concept by BI from a legal aspect (laws and regulations).
B. Discussion
IMF released data in early 2022 that there were around 100 countries exploring CBDCs and distributing them to the public. In China, there is already an e-CNY that has become a CBDC with more than 100+ million individual users and billions of yuan in transactions. At the G20 event and according to the report, the Governor of BI said that in achieving CBDC development there must be a focus on 3 (three) important aspects, namely: CBDC design, use of CBDCs in financial inclusion (directly or through digitizing e-payments), and cross-region CBDC cooperation ( bilaterally, multilaterally, and through the IMF). To optimize the issuance of CBDCs by BI, which can be called digital rupiah, it is necessary to learn from countries that have practiced it (best practice), in this case China with its e-CNY. This is useful for demonstrating the strength of Indonesia's currency and financial system in the eyes of the world that it is able to innovate and be at the forefront of implementing digital currency. It is undeniable that currency is also a form of sovereignty of a country and a standard of a country's capability in the global economy.Â
Fundamentally, CBDCs are the same as the concept of money, with token-based to demonstrate originality as a currency and account-based to demonstrate the legitimacy of ownership of the subject matter. Looking at the practice of e-CNY in China, it was implemented by the central bank there in stages through remote projects in several cities in the past such as Chengdu and Xiong'an until it finally succeeded nationally, due to factors that are still uneven in access to technology throughout China. Globally, according to the World Bank, CBDC should ideally use blockchain and distributed ledger technology. Based on this technology, the payment system can run peer to peer safely and third parties act as intermediaries, so that CBDC will be distributed effectively and efficiently to users. However, this sytem not ideally if we looked at e-CNY which digital currency is controlled and produced by the central bank because it has mandated by the law that central bank is state body who managed the currency. This is an overview of e-CNY in China:
From the display of e-CNY that can be downloaded on the user's smartphone, it can be seen that it is more or less similar to e-payment. However, this is different. CBDC is essentially different from electronic money because electronic money is money stored in an electronic system in rupiah, dollar, and so on. Meanwhile, CBDC is a separate digital-based currency that is controlled by the central bank in its use. e-CNY became the most advanced CBDC project in the world which was originally due to the Chinese central bank's concern about the popularity and attractiveness of cryptocurrencies. e-CNY is designed to replace cash in circulation and does not act as and which is stored in a bank account like electronic money. This e-CNY is not designed with blockchain because it is monitored for validation and verification by China's central bank.
According to Article 4 of Law Number 23 of 1999 concerning BI ("BI Law") it is stipulated that the function and objective of BI is to maintain the smooth running of the payment system. The digital rupiah itself is not yet legally regulated because Article 2 number (2) of Law Number 7 of 2011 concerning Currency ("Currency Law") still stipulates that the legal currency is the rupiah which consists of currency and metal. If BI really shows commitment in initiating digital rupiah as an Indonesian CBDC, then there are several legal aspects that need to be implemented by BI. First, BI needs to revise the Currency Law or establish new regulations through the BI Regulation ("PBI") regarding this digital rupiah. If you look at China, they regulated e-CNY in the regulations of their central bank, namely the People's Bank of China. Second, BI must also carry out a supervisory function in the event that digital rupiah is successfully initiated by identifying and imposing sanctions for violations of counterfeit digital rupiah. Third, in designing the CBDC system, BI must also pay attention to aspects of good personal data security in accordance with the PDP Law so that digital data and rupiah are safe from cyber attacks and hackers so that losses are prevented. In this way, CBDC, which has become an idea for BI, can avoid the risk of failure and disputes that may arise in the future, because the main purpose of law is to regulate and resolve problems, so as to create certainty, fairness and benefits in the banking sector and currencies in Indonesia. Indonesia. Fourth, BI must also be intense in cooperating with countries and regional organizations internationally in CBDC research and development so that there will be a transfer of good information and knowledge.
C. Conclusion
In order to adapt to developments in the digital currency, BI as Indonesia's central bank plays a role at the forefront of innovation in regulating that system. In this latest development, it is necessary to study in depth the application of CBDC by BI in the form of a legal-based digital rupiah as the main instrument. The real form is in the form of regulation, supervision, imposition of sanctions, and increased cooperation. Whereas from the above study, it is clear that CBDC is considered an ideal innovation in the financial system, especially in the function of money as a means of payment because it is proven to increase transparency, accurate verification by central bank, reduce production costs like in paper-money, and transaction time efficiency. This can be seen from the practice of e-CNY in China which has successfully implemented CBDC.
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