Indonesia Introducing New National Payment System to Protect Against ‘Geopolitical Consequences’ – Economics Bitcoin News
Indonesia introduces a new national payment system as the country strengthens its efforts to de-dollarize and protect against “potential geopolitical consequences”. The new payment system will A senior central bank official said that the replacement of Visa and Mastercard in state-owned enterprises and companies. “We expect it to spread very soon.”
Indonesia creates a new national payment system
Indonesia will introduce a new national payment system that will replace Visa and Mastercard in state-owned enterprises and companies, according to Diki Kartikuyono, Head of Strategic Management and Governance Department at Bank Indonesia. CNBC quoted the central bank official as saying on Monday:
According to the President’s plan, the transition to our national payment system is proceeding smoothly. We expect it to spread very soon, including within state-owned enterprises.
The central bank governor explained that Indonesia’s decision to set up its own payment system was “very timely,” stressing that Southeast Asian countries should create a “safety cushion that protects businesses and ordinary citizens” from increasing financial uncertainty in the West.
In March, Indonesian President Joko Widodo urged regional authorities to use credit cards developed by local banks rather than global financial conglomerates as a measure to protect transactions from any “potential geopolitical consequences”.
Dudit Probuyakti, a board member of the Indonesian Credit Card Association, told Sputnik that Indonesia will apply what it learned from Russia’s experiences with the Mir payment system to its own payment system. The Mir payment system, backed by the Russian government, gained popularity after Western countries imposed heavy sanctions on Russia in response to its invasion of Ukraine.
Bank Indonesia Governor Peri Wargio recently said that Indonesia is following the lead of the BRICS economic bloc by diversifying the use of its currency by implementing a local currency system. He noted that Indonesia has also concluded agreements with many countries to use local currencies in trade, including Thailand, Malaysia, China and Japan.
Besides Indonesia, nine other countries in Southeast Asia (Brunei, Cambodia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam) have recently agreed to “encourage the use of local currencies in economic and financial transactions.” The ten countries are members of the Association of Southeast Asian Nations (ASEAN).
Meanwhile, the leaders of the BRICS countries plan to discuss a single currency at their upcoming leaders’ summit. The BRICS countries include Brazil, Russia, India, China and South Africa. Many people believe that the BRICS currency will erode the dominance of the US dollar.
What do you think about Indonesia establishing a national payment system to reduce the country’s dependence on Western countries? Let us know in the comments section below.
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