The National Bank of Cambodia’s new digital currency is called Bakong.
It’s effectively a central bank digital currency (CBDC) and was launched on a trial basis throughout Cambodia in July. Chea Serey, director-general of the National Bank of Cambodia (NBC), said the new system will be operational within the current fiscal quarter, Cointelegraph reported. Serey described Bakong as “the national payment gateway for Cambodia.”
Serey said, “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. Eventually, we hope to allow cross-border payment through the Bakong system too.”
Unlike most blockchain-driven cryptocurrencies, Bakong is a closed system that’s backed by banking authorities. A software wallet is linked to each user’s bank account for them to more easily interact with hard currency. The system supports real-time transactions while the National Bank of Cambodia stores centralized records tracking where the money goes.
This is a bit of an adjustment to Cambodia’s previous course on cryptocurrency and blockchain technology. The country had previously issued requirements for a cryptocurrency business license – a Cambodian crypto exchange became the first such licensed business in August 2018.
In any event, the at-scale use case of a national bank granting its users the ability to transact with each other using blockchain verification seems likely to accelerate adoption.
The NBC, like most other central banks, has issued warnings about the risks associated with dealing in private virtual currencies, Bitcoinist reported.
Back in 2018, reports emerged of a Cambodian crypto project called Entapay. At the time, proponents touted the payment medium as a replacement for payment services like VISA in the country.
However, the project apparently failed to take off with no new developments reaching the crypto news circle in over two years. Despite initial reports of government backing for the project, both the NBC and the Securities and Exchange Commission of Cambodia have denied such endorsements.