The Indonesian central bank has announced a wholesale CBDC consultation process.

Bank Indonesia, Indonesia’s central banking regulator, has announced the start of a consultation process for Project Garuda, its central bank digital currency (CBDC) initiative.

According to a report in the local news publication Tempo, Bank Indonesia’s consultative process is intended to solicit feedback from industry stakeholders prior to the CBDC’s full-scale launch. The central bank confirmed that the public consultation process would focus solely on the CBDC as a whole, with plans for a retail version in the works.

“We have issued a consultative paper and met with big players who we believe are capable, and inshallah, we will issue a proof of concept around July,” said Bank Indonesia Governor Perry Warjiyo. “We will also advocate for the government’s downstream project and several other policies.”

The consultation of stakeholders is the first step in Indonesia’s plan to launch a wholesale CBDC, which Warjiyo believes will be critical to the country’s position as a digitalization leader. CBDCs, according to Warjiyo, will promote financial inclusion and deepen the money market while being environmentally friendly due to distributed ledger technology (DLT).

“Digital Rupiah is BI’s contribution to the country in order to preserve rupiah sovereignty in the digital era,” according to a statement on the central bank’s website.

According to Project Garuda’s white paper, the wholesale CBDC will not be limited to commercial banks, and the central bank will determine which entities will be wholesalers. The future retail digital rupiah will be distributed by wholesalers, with the central bank overseeing all wholesale transactions.

The second phase of Project Garuda will investigate the use of CBDC in the tokenization and settlement of securities transactions. Following the scalability issues that have plagued distributed ledgers, analysts believe that Bank Indonesia’s retail CBDC will not be built on DLT.

A flurry of CBDC-related activities

Over the last month, central banks around the world have taken an active role in developing CBDCs. The People’s Bank of China (PBoC) is leading the way with a series of innovations aimed at increasing digital yuan adoption rates.

Chinese municipal governments have distributed nearly $20 million in digital yuan subsidies in the last 30 days to spur growth. The digital yuan has been used to trade securities, and top members of the Chinese Communist Party (CCP) have set new targets for transaction volumes in the next 12 months for local governments.

Thailand, the Philippines, and Hong Kong have also made significant strides in CBDC development since the beginning of the year.

Read nChain’s CBDC playbook to learn more about central bank digital currencies and some of the design decisions that must be made when creating and launching them.