Digital Rupiah vs. Cryptocurrency: The Direction of Digital Currency in Indonesia

Introduction

Legal Literacy- In recent years, the world has witnessed a major transformation in the global financial system through the presence of decentralized digital currencies. It was initially pioneered by a digital currency calledBitcoin. In thepeer to peer (p2p) ecosystem, which is decentralized and unregulated, the main obstacle to creating digital currency istrust also calledThe Byzantine General’s Problem.[1]as an example of how we can trust an unregulated system to work well withouterror orfraudso as to createtrust towardsuserwho use the system. The presence of a regulator to regulate not only makes rules but also acts as a supervisor in commercial activities so that these activities can be carried out fairly and orderly, thereby protecting the interests of consumers or business actors who run the system. The presence ofBitcoinin 2009 through the publication ofresearch paperentitledBitcoin: A peer to peer electronic cash system written by a person with the pseudonym Satoshi Nakamoto.[2]Bitcoinitself was created with a technology calledBlockchainusing cryptographic technology to store value in data blocks and distribute it into an ecosystem where every data input into the block will be verified by allminerso that the data in the block is transparent and accountable. This scheme is able to build trust among the public that a system that operates without regulation can run transparently and perform economic functions like a conventional banking system supervised by a regulator.[3]This is evidenced by the emergence of various decentralized financial activitiesDecentralized FinanceAs of July 2025, the DeFi market size is approximately 139.74 billion USD.[4]as well as the tokenization process of real-world assets (real-world assets), such as Government Bonds and other financial instruments. According to a report byMcKinsey & Companyin the summer of 2024, the financial products with the most potential for tokenization by 2030 are cash and deposits, bonds, loans, and ETF-shaped mutual funds. This estimate is compiled based on data from various sources to project the size of the real-world asset tokenization market (real-world asset) and what types of financial products are most likely to adopt it. Since 2024, the topic of tokenization onblockchainhas received widespread attention, although estimates of its market value vary widely among sources, as the financial industry seeks ways to improve technology and respond to increasing regulatory pressures.[5]The development of blockchain technology that offers a monetary system through decentralized and unregulated digital currencies encourages central banks to respond by issuing Central Bank Digital Currency (CBDC). CBDC is an official digital currency issued by a central bank and is under government regulation.[6]According to research by Heitmann et al., the launch of CBDC significantly increases the financial stability of banks in developing countries through increased financial inclusion and payment system efficiency.[7]Indonesia is one of the countries actively developing CBDC through Bank Indonesia's initiative called Proyek Garuda: Menavigasi ArsitekturRupiah Digital. This project is designed to explore the issuance of Rupiah Digital with a based approach.Distributed Ledger Technology(DLT) and centralized infrastructure.[8]In Indonesia, Bank Indonesia is developing the Garuda Project initiative to explore the issuance of a Digital Rupiah based on Distributed Ledger Technology (DLT) and a centralized system. The latest Proof of Concept (PoC) report indicates that the use of DLT is considered feasible and secure in the development of the Digital Rupiah, making the Garuda Project an important first step towards a modern and inclusive financial system.[9]