Cambodia to soon launch a central bank digital currency

The National Bank of Cambodia will launch a central bank digital currency (CBDC) in the first quarter of the fiscal year, a bank official announced recently.

Speaking at The Post (via The Phnom Penh Post), director-general Chea Serey said that the "Project Bakong” was launched on a trial basis in July and is now in the final stages of deployment.

Bakong, she explained, is a quasi-form CBDC and is expected to be operational within the next few months. Serey described Bakong as “the national payment gateway for Cambodia.”

“Bakong will play a central role in bringing all players in the payment space in Cambodia under the same platform, making it easy for end-users to pay each other regardless of the institutions they bank with,” Serey said. “Eventually, we hope to allow cross border payment through the Bakong system too.”

The project has received the support of 11 banks including Phnom Penh Commercial Bank (PPCBank). PPCBank President Shin Chang Moo revealed that his bank is deploying the system in all of its branches and more are expected to join soon.

“We are in the final stages of the deployment. It has taken a little longer than expected because we were ensuring that the system is as useful and convenient for the users as possible. We will offer the service as soon as it launches,” Chang Moo said.

Chang Moo considered the new system cheaper and more convenient compared to conventional payment and transfer methods such as credit and debit cards. With reference to the concerns of some banks that they will lose some of their market share to Bakong, he said:

"Our industry is relatively immature in terms of the number of service providers and users. Bakong will eventually create financially inclusive ecosystems that all the stakeholders in the industry can benefit from."

Bakong is not like most cryptocurrencies that are decentralized because it is a closed system backed by banking authorities. The Bakong Wallet is linked to the user’s bank accounts to exchange with hard currency and all transactions are done in real-time and recorded safely at NBC, he said.

Chang Moo is also confident that many other central banks around the world will follow suit. Bakong was developed by the Japanese blockchain company Soramitsu, which also implements a similar system to other countries worldwide.

The CBDC “is simply a tokenized version of the USD and Riel fiat money in NBC’s reserves,” CEO Makoto Takemiya told CoinDesk. "[T]he system can support any type and number of currencies, including cryptocurrency,"

Meanwhile, Bank of Japan (BOJ) Deputy Governor Masayoshi Amamiya said that Japan should be ready to issue digital currencies if public demand surges.

TokenPost | [email protected]