BI Affirms Digitalisation Complements, Not Replaces, Physical Rupiah

Assistant Governor and Head of Bank Indonesia’s Currency Management Department, Anwar Bashori, has said that the transformation of money usage into digital form is not a replacement for physical rupiah, but rather a complement to the evolving models of financial transactions.

“Digitalisation is growing extraordinarily, but Bank Indonesia maintains that digitalisation and cash are not substitutes for one another; they are complementary and mutually reinforcing,” Anwar told the media at the opening of the 2026 Festival Rupiah Berdaulat Indonesia (Ferbi) at Istora Senayan, Jakarta, on Friday.

Anwar said Bank Indonesia continues to support the digitalisation of financial transactions, including through the massive expansion of QRIS across various regions of Indonesia.

However, with Indonesia comprising more than 17,000 islands and telecommunications network connectivity still posing challenges in some areas, physical rupiah currency remains essential to support economic activity.

He cited remote locations with limited internet access and uneven levels of education compared with Java as reasons Bank Indonesia must continue circulating rupiah and replacing currency every year, working with naval patrols to deliver the money.

“In Jakarta, if there is damaged currency, we have ATMs and can drop off replacements at any time. But in remote areas, the cycle is quite long because the terrain is difficult. Yet we must be present, so we use ships to replace the currency in those remote places every year,” Anwar said.

He also noted that physical money remains vital as a medium of exchange for sellers and buyers in traditional markets, most of whom are not connected to digital financial services such as QRIS.

In addition, paper currency is still needed to preserve the tradition of giving angpao during Lebaran and other major religious holidays.

Anwar added that during disasters, the need for banknotes is also irreplaceable because cash does not depend on the availability of electricity or telecommunications networks in emergencies.

“These are the things we continue to pay attention to, and no country has abandoned physical currency. Digitalisation is not a substitute, but a complement,” Anwar said.