The Bank of Indonesia has announced its intention to withdraw metal rupiahs from circulation. This concerns not all metal coins but rather fairly old ones. The coins from the years 1991, 1993, and 1997 are being phased out, although they haven't been widely used for quite some time.
This decision comes as these coins have become rarely used in daily transactions. Instead, the Bank of Indonesia plans to replace them with more convenient and secure digital payments.
The process of withdrawing metal rupiahs from circulation will be gradual to ensure a smooth transition for all participants in the economy. "People who own metal rupiahs and want to exchange them can do so at commercial banks from December 1, 2023, to December 1, 2033, which means even 10 years after the date of annulment," said Erwin Hariono, the Executive Director of the Communication Department at the Bank of Indonesia. The replacement of annulled and withdrawn metal rupiahs will be done at the same nominal value indicated on the coins. If a coin is somehow damaged, it will still be replaced if you have at least its larger half.
This isn't the first time the Bank of Indonesia has decided to withdraw coins from circulation. Earlier in 2022, the bank decided to phase out special commemorative banknotes issued in 1995 to celebrate the country's 50th independence anniversary.
Overall, these developments underscore Indonesia's commitment to modernizing and digitizing its economy and payment systems. Local digital payment systems are already extending beyond the country's borders. For instance, the Bank of Indonesia recently signed an agreement with the United Arab Emirates for the mutual use of the Indonesian QRIS payment system.
"We have just signed a memorandum of understanding with the United Arab Emirates so that later when we go to Dubai, we can use QRIS," said Perry, the Governor of the Bank of Indonesia, at the Bank Indonesia Together with the Community event. Similar negotiations are underway with representatives from Singapore, Japan, India, and China.