Maiden Labs

CBDC Field Research Insights for the 2023 Report, “CBDC: Expanding Financial Inclusion or Deepening the Divide? Exploring Design Choices that Could Make a Difference”

The use of “e-money” in Indonesia began in 2007. In 2009, uang elektronik (electronic money) was given a distinct legal definition apart from the type of digital money used with credit, debit, and ATM cards (BI 2009). Defined as a means of payment, e-money is stored electronically (for instance, on a server) and functions practically as a type of digital credit that can be purchased from licensed companies and usually accessed through an app. Once purchased, this money can only leave the app in the form of payment to an affiliated merchant, unless the customer has upgraded their account. In this way, e-money operates similarly to gift cards—money that has been earmarked for a specific purpose (Zelizer 1995).

The discourse around digital payments in Indonesia has emphasized developing toward a “less-cash” society (BI 2014; SNKI 2017). In a context dominated by cash, and where few people have access to credit cards, e-money represents a novel alternative to cash-based transactions (Azali 2016; Demirgüç-Kunt et al. 2018). However, while the e-money transacted through these apps may be denominated in state-issued rupiah, it is being transported within a privately controlled infrastructure.