CBDC Is Not the Answer If the Rupiah Remains Unstructured
Rupiah movements and yields on State Securities (SBN) confirm that the market remains uncomfortable with current conditions. The yield on 10-year tenor SBN continues to hold around 6.3%-6.4%, a level indicating investors still demand a risk premium amid global uncertainty and perceptions regarding the direction of domestic fiscal policy. This means the government’s funding costs have not fully declined into a genuinely “loose” zone.
Meanwhile, the rupiah did strengthen by 0.09% to Rp16,825 per US dollar on 13 February 2026. However, this strengthening reflects short-term sentiment rather than fundamental structural change. External pressure—particularly the strengthening of the US dollar in a Dollar Smile pattern—remains the dominant factor shadowing exchange rate stability.
Yet from a domestic fundamental perspective, economic performance is not poor. Indonesia’s economic growth throughout 2025 reached 5.11%, demonstrating relatively solid consumption and investment resilience amid global pressures.
The combination of maintained growth and controlled inflation should provide a buffer for stability. However, financial markets do not simply read growth figures; they read policy consistency, fiscal discipline, and monetary credibility.
This is where every policy reform discussion, including rupiah redenomination or digital rupiah development, must be placed within the context of stability and risk perception. The macroeconomic momentum is relatively stable, but market sensitivity remains high. Getting the policy sequence wrong could create volatility that is entirely unnecessary.
In this context, market data signals that although rupiah pressure and SBN yields have not reached extreme levels, the market remains sensitive to fiscal and monetary policy. Uncertainty regarding policy direction, including perceptions of central bank independence, can trigger further volatility in foreign exchange and debt securities markets.
This situation confirms that any major monetary reform, such as rupiah redenomination, must be communicated and designed with considerable care to avoid worsening market uncertainty.
Redenomination is merely a simplification of the accounting unit without changing real value, purchasing power, or fiscal and monetary policy. In many countries, this step is undertaken to improve transaction and accounting user experience, and to strengthen the perception of currency value among domestic and international actors.
Within the framework of Prabowonomics, which prioritises economic self-reliance, national resilience, and financial modernisation, redenomination is not merely a numerical substitution. It is a strategy of symbolic sovereignty, tidying up the rupiah’s identity so it is psychologically more equal to global currencies such as the US dollar or euro, whilst bringing greater clarity of monetary unit into the digital economic system.
This approach does not negate the need to develop a Central Bank Digital Currency (CBDC) as proclaimed by Bank Indonesia in its Indonesian Payment System Blueprint 2026-2030. However, sequencing matters—conducting redenomination first, then CBDC afterwards, offers several structural and policy advantages:
- Redenomination simplifies the monetary unit, making the technical design of future CBDC easier without the burden of complex zeros; (2) The public and market can adapt first, making the transition to CBDC smoother with minimal psychological shock; and (3) Bank Indonesia can remain focused on its priority of exchange rate stability and inflation control during the early transition phase, without distraction from complex digital policy.
This strategy also minimises the risk of short-term market volatility. Redenomination is conducted through dual display (showing Old Rupiah and New Rupiah in parallel) during the transition period, allowing market participants to adjust contracts, financial reports, and investment planning without price chaos. This approach has been used in several countries that simplified their currency without causing financial disruption.
However, the success of this strategy depends heavily on institutional discipline. During the redenomination phase, Bank Indonesia must appear highly prudent and consistent in implementing monetary policy, prioritising exchange rate stability, controlled inflation, and long-term policy credibility.
There must be no policy that appears to blur fiscal and monetary functions, as this could worsen market perception and increase the risk premium, reflected in expected SBN returns.
The role of government and the Ministry of Finance is also crucial in ensuring the entire national accounting system—from the state budget, corporate reporting, to the banking system—is ready for the transition. Public education must be conducted well before the effective date, so the public understands that redenomination is not a cut in real value or a crisis cycle, but rather a technically and psychologically mature modernisation of the monetary unit.
After the new Rupiah is established and the public understands the new unit of value, the next step would be launching the Digital Rupiah (CBDC), as a digital representation of the new Rupiah. In this sequence, CBDC becomes not merely a digital payment tool, but the crowning achievement of Indonesia’s monetary evolution—a symbol of monetary identity that is clean, credible, and ready to enter the era of global digital payment systems.
In an era of Dollar Smile and continuing external pressure, Indonesia needs not merely technological innovation. It requires policy clarity, monetary discipline, and a long-term strategy that builds market trust, after which digital innovation can be launched with strong legitimacy.