The Landscape of Local Currency Payments Post ASEAN Summit 2023

Indonesia played host to this year's ASEAN Summit. Held twice annually, the 42nd Summit saw success in Labuan Bajo in May 2023, while the 43rd Summit was held from September 5-7, 2023, in Jakarta. Among others, one important decision made at the ASEAN Summit 2023 was related to the use of local currencies for transactions among ASEAN member countries. Through Local Currency Transaction(LCT), it is hoped that greater stability in currency exchange rates can be achieved. Here's the full explanation!

Background of the ASEAN Summit 2023's LCT Decision

The decision to implement Local Currency Transaction (LCT), which must be coupled with Regional Payment Connectivity (RPC), stemmed from a strong reason. Nations participating in ASEAN Summit 2023 believe that transactions involving local currencies will lead to a more stable exchange rate, as there will be no reliance on foreign currencies, particularly the US dollar, which has been the norm thus far.

A stable exchange rate could fortify the ASEAN economy due to the decreased influence of developed countries in America and Europe. Australian Prime Minister Anthony Albanese lent his support to this initiative by donating 95.4 million USD, rooted in his confidence in ASEAN's potential, which encompasses prosperity, peace, and the sought-after economic stability.

Benefits of the Implementation of Local Currency Transactions in ASEAN

The use of local currencies for transactions holds several advantages for ASEAN member countries. Firstly, it will lessen dependence on the US dollar, leading to more controlled stability.

Another benefit is that transactions among the public will become faster, easier, and cost-effective, as LCT will be supported by RPC.  For those unfamiliar, RPC is a payment connectivity that allows transactions to be conducted in a more collaborative manner. Think of it as similar to the use of QRIS as a payment solution within ASEAN.

Naturally, executing this plan requires thorough preparation. The five nations that will be actively implementing local currency payments (Indonesia, Singapore, Malaysia, Thailand, the Philippines, and Vietnam) have agreed to increase the availability of private banks to facilitate this activity, while also involving a number of private exporters.

Efforts to Promote Local Currency Transactions

To facilitate transactions in the local currency, Rupiah, Indonesian has entered into a memorandum of understanding. This move took place in the midst of the ASEAN Indo-Pacific Forum (AIPF), which is part of the ASEAN Summit 2023.

Several ministers who signed the memorandum of understanding included Coordinating Minister for Economic Affairs Airlangga Hartarto, Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan, Minister of Finance Sri Mulyani Indrawati, Minister of Trade Zulkifli Hasan, Minister of State-Owned Enterprises Erick Thohir, and Minister of Foreign Affairs Retno Marsudi, among others. This significant event was witnessed by the President of the Republic of Indonesia Joko Widodo.

In addition to the signing of the memorandum of understanding, a national LCT task force has been established under the supervision of Bank Indonesia, the Financial Services Authority (OJK), and the Deposit Insurance Corporation (LPS). With the presence of this task force and the signing of the memorandum of understanding, Indonesia demonstrates its commitment to reducing the use of US Dollar for transactions. It is hoped that in the future, the number of transactions using the local currency will surpass those using US Dollars in Indonesia.

The Role of Financial Industry Players in Supporting the Decision of ASEAN Summit 2023

In line with the plan, an alternative payment method that can be used to facilitate the establishment of the LCT ecosystem is QRIS (Quick Response Code Indonesian Standard). This payment method will enable Indonesians to make transactions using Rupiah, even when they are in an ASEAN member country.

To support this plan, business owners can start using Cross Border QRIS, which is currently available in Thailand and Malaysia. Essentially, Cross Border QRIS is a payment method that allows customers to make payments by scanning the QR code provided by merchants in the destination country, primarily partner banks integrated into the QRIS network.

Upon making a payment, the currency from the user's home country, such as Rupiah, will be automatically converted to the local currency of the destination country, like Baht (Thailand) or Ringgit (Malaysia), enabling business owners to receive payments directly.  Ultimately, this payment method will drive the adoption of transactions with LCT.


The decision to implement LCT carries significant economic implications.  The commitment of ASEAN countries to LCT is also supported by financial industry players in Indonesia, including Jalin. The technology provided by Jalin supports the Cross Border QRIS service implemented in other ASEAN countries besides Indonesia. It is hoped that this initiative can stabilize local currencies and invigorate the economy in ASEAN countries, including Indonesia.