Cambodian Central Bank to trial digital currency in July, with 11 partner banks involved
According to The Phnom Penh Post's report on the 27th, the Central Bank of Cambodia will launch its central bank digital currency in several months.
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According to the Phnom Penh Post on the 27th, the Central Bank of Cambodia is set to implement a central bank digital currency in the coming months.
Chea Serey, the Director-General of the Central Bank of Cambodia, told the media that a blockchain-based peer-to-peer payment system and transfer platform called "Project Bakong" will go live in the next few months.
Reportedly, this project has the support of at least 11 banks. Chea Serey stated that this initiative, equivalent to a Central Bank Digital Currency (CBDC), was trialed in July and is scheduled to officially launch within this fiscal year. Initially operating domestically, cross-border transfers will be enabled in the future.
Chea Serey stated, "This is Cambodia's national payment gateway."
Chea Serey clarified that this digital currency will be available for general consumers. She mentioned, "Bakong will play a central role among all the players in the payment ecosystem. End-users of any participating bank can use the platform."
Shin Chang Moo, the CEO of Phnom Penh Commercial Bank, has mentioned that all branches are preparing to integrate this system. He praised Bakong for the potential cost-efficiency and convenience it could bring, even though it might impact existing financial operations in the short term. However, he believes it will contribute to financial inclusion in Cambodia.
Shin Chang Moo said, "In terms of service providers and the number of users, our industry is relatively immature. Bakong can ultimately foster financial inclusion to benefit all stakeholders."
Bakong is not a decentralized cryptocurrency
A central bank digital currency is issued and maintained by the central bank, which differs from decentralized cryptocurrencies and stablecoins operated by private entities like Libra.
Shin Chang Moo mentioned that currently, the Bakong wallet is linked to users' bank accounts and exchanges based on fiat currencies, lacking speculative nature. All transactions will be recorded in real-time by the Central Bank of Cambodia.
Technology provided by Japanese company
Soramitsu is a Japanese company providing blockchain solutions for enterprises, governments, and academic institutions. They are offering a technical platform for Cambodia based on a private blockchain called Hyperledger Iroha.
Soramitsu's CEO stated that Bakong simply digitizes the Cambodian central bank's fiat and US dollar tokens. Their system is also being tailored for similar systems in other countries.
Currently, at least 18 countries are exploring central bank digital currencies. Recently, six central banks from the UK, Canada, Japan, Europe, Sweden, and Switzerland have formed a Central Bank Digital Currency group to explore use cases.
Related Reading
- Multiple countries including the UK and Japan are progressing with plans for central bank digital currencies
- Boosting the appeal of the US dollar! Former CFTC chairman and Accenture advocate for a central bank digital dollar
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