Indonesia is presenting a new national payment system as the country furthers its de-dollarization efforts and protection against “ possible geopolitical consequences. ”The new payment system will replace Visa and Mastercard in state-owned institutions and companies, a topmost central bank official spoke. “We expect that very shortly it'll become widespread.”
Indonesia Establishes New National Payment System
Indonesia will present a new national payment system that will replace Visa and Mastercard in state-owned institutions and companies, according to Dicky Kartikoyono, Bank Indonesia’s Head of Strategic Management and Governance Department. The central bank official was quoted by CNBC as saying that Monday:
In accordance with the president’s plan, the transition to our national payment system is proceeding smoothly. We expect that very soon it will become widespread, including within state-owned enterprises.
The central banker clarified that Indonesia’s decision to make its own payment system is “ veritably timely, ” emphasizing that Southeast Asian countries should establish “ a safety cushion that will protect businesses and ordinary citizens ” from raising financial uncertainty in the West.
In March, Indonesian President Joko Widodo urged regional authorities to utilize credit cards evolved by local banks rather than global financial conglomerates as a measure to shield deals against any “ possible geopolitical consequences. ”
Dodit Proboyakti, a board member of the Indonesian Credit Cards Association, reported Sputnik publication that Indonesia will apply what it learns from Russia’s experiences with its Mir payment system to its own payment system. The Russian government-backed Mir payment system gained significant popularity after Western nations imposed heavy sanctions on Russia in reaction to its invasion of Ukraine.
Bank Indonesia Governor Perry Warjiyo newly spoke that Indonesia is succeeding the BRICS economic bloc’s de-dollarization lead by diversifying its currency usage through the implementation of the local currency system. He remarked that Indonesia has similarly made agreements with several nations to utilize local currencies in trade, including Thailand, Malaysia, China, and Japan.
Besides Indonesia, nine different Southeast Asian countries (Brunei, Cambodia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam) newly agreed to “ encourage the usage of local currencies for economic and financial deals. ” The 10 countries are members of the Association of Southeast Asian Nations (ASEAN).
Meanwhile, the BRICS leaders plan to talk over a common currency at their forthcoming leaders' summit. The BRICS nations contain Brazil, Russia, India, China, and South Africa. numerous people believe that a BRICS currency will erode the U.S. dollar’s dominance.
(Kevin Helms, Bitcoin.com, 2023)