Indonesia, UAE Banks Collaborate on Cross-Border Payments

The central banks of Indonesia and the United Arab Emirates (UAE) have signed an agreement to boost payment system cooperation.

As Open Gov Asia reported on Monday (Nov. 29), the agreement is focused on safer and more efficient transactions, cross-border payment systems, and anti-money laundering and anti-terrorism efforts.

According to a statement from the UAE’s central bank, the partnership aims to improve collaboration in “payment systems and digital financial innovation, including conventional and Islamic finance.”

Read more: FATF: Stablecoins Could Be the Currency of Choice for Money Launderers, Terrorists

The Bank of Indonesia says the agreement shows its commitment to fighting terrorism funding and money laundering, while also helping Indonesia become a member of the Paris-based Financial Action Task Force (FATF).

Last year, the agency said that stablecoins could become a target for money laundering and terrorist financing, and called on jurisdictions in the G-20 to implement its standards.

Learn more: Indonesia Central Bank Among Latest to Ban Crypto as Payment

In June, the Bank of Indonesia’s Governor Perry Warjiyo announced at a virtual seminar that the bank would forbid cryptocurrency payments, saying crypto will not be used in the form of “other financial services tools.”

Indonesia engaged in a widespread crypto crackdown earlier this year, forcing the shutdown of three crypto trading platforms.

The report notes that this action comes as Bank Indonesia is preparing to launch BI-FAST, a real-time retail payment system infrastructure designed to serve as a bridge to the Indonesia Payment System Blueprint and to meet the public’s demand for fast, affordable, reliable and safe payment system.

The system is scheduled to become operational in the second week of December, with its first phase focusing on individual credit transfers. From there, the system would expand to include bulk credit, direct debit and payment requests.