According to Bank Indonesia, Central Banks Digital Currencies (CBDCs), digital versions of the national currency introduced in response to the increased adoption of cryptocurrencies, will be an essential tool in combating cryptocurrencies, according to Bank Indonesia.

The Indonesian central bank is considering the introduction of a digital rupiah to “counter” cryptocurrencies like Bitcoin (BTC), the deputy governor of the Indonesian central bank, Juda Agung, said at an international meeting.

“CBDC will be one of the tools against crypto. We assume that people will find CBDCs more reliable than cryptocurrencies. The CBDC will be part of an effort to address the use of cryptocurrencies in financial transactions, ”Agung announced, according to a November Bloomberg report.

The official noted that cryptocurrencies like Bitcoin are currently trading alongside commodity futures and are regulated by the Department of Commerce despite the serious impact it has on the financial system.

The news comes shortly after it was reported to the National Ulema Council (MUI), Indonesia’s leading Islamic academic body, that cryptocurrencies like Bitcoin are banned or banned under the teachings of Islam. The East Java branch of one of the former MUIs published a statement on the use of the cryptocurrency haram at the end of October.

As previously reported, the Indonesian government has taken a mixed stance on crypto regulation. Despite the 2017 ban on crypto payments, local authorities have chosen to keep crypto trading legal. In April 2021, the Indonesian Commodity Futures Trading Authority (Bappebti), under the Ministry of Exchange, announced its plans to open a state-supported cryptocurrency exchange in the second half of 2021.

While Indonesian regulators have mixed views on cryptocurrencies, they have increasingly considered a potential CBDC. In May, the Governor of the Indonesian Central Bank, Perry Warjiyo, announced plans to introduce the digital rupiah as a legal payment instrument in Indonesia.

Related: Singapore’s CBDC is focused on retail to protect itself from privately issued stablecoins

CBDCs like the Chinese digital yuan are clearly designed to limit the adoption of cryptocurrencies as one of their main characteristics. Indonesia isn’t the only one who believes that CBDCs can help governments fight crypto. In mid-November, Russia’s central bank governor Elvira Nabiullina said that CBDCs should be a good option for governments to replace decentralized cryptocurrencies like Bitcoin.