A microfinance customer in Cambodia holds a loan denominated in the local currency, the riel. Photononstop via AFP / Philippe Lissac
A microfinance customer in Cambodia holds a loan denominated in the local currency, the riel. Cambodia's new Bakong system is expected to reduce the volume of cash transactions in the country. Photo: AFP

As China and other countries rush to get their central bank digital currencies (CBDCs) into circulation, Cambodia has launched Bakong, a blockchain-based platform for digital transactions, Cointelegraph reports, citing an article in Dap-News. 

“Bakong, a payment and money transfer service through banks or microfinance institutions, was established under the initiative of the National Bank of Cambodia,” said the article. The Southeast Asian country’s central bank collaborated with a number of entities on the project.

Bakong first secured involvement from Cambodian financial giant PRASAC in October 2019. In January, Cambodia’s central bank forecast the platform’s launch, describing the system as a closed-circuit enterprise. 

“Bakong is a new and modern payment tool that allows customers to make interbank transactions and bill payments easily, quickly, securely and free of charge,” PRASAC’s executive vice-president, Sony Say, said, according to Dap-News.

“I hope the official launch of the Bakong System today will help promote social welfare and also prevent the spread of [Covid-19] by providing seamless e-payments from person to person,” Cambodian central bank director general, Chea Serey, said, The Phnom Penh Post reported on Oct. 28.

“Online payments can also be made through the Bakong System, which also offers alternative options for … transactions such as deposits, withdrawals, sending and receiving [via] e-wallet.”

The Phnom Penh Post article clarified, however:  “In response to rising concerns domestically and internationally, Serey stressed that Bakong is not a central bank digital currency.” 

Read: Digital yuan fails to excite Shenzhen shoppers