The National Bank of Cambodia (NBC) has announced it is preparing to launch a central bank digital currency (CBDC) that would be called “Bakong” at some point during this fiscal quarter.
NBC’s director-general, Chea Serey, said the central bank was developing “the national payment gateway for Cambodia” as a blockchain-based, peer-to-peer platform with its own specially designed cryptocurrency.
According to her, the initiative is known as “Project Bakong” was first trialed by NBC in July 2019. However, she did not state a definite period when the CBDC would be launched.
Serey also stated the CBDC currently has the backing of 11 out of the country’s 43 commercial banks. According to her, more financial institutions will join the platform and make use of the CBDC once the project goes live.
President Shin Chang Moo, in an interview, stated the CBDC will work on a closed system supported by its banking members, one of them, Phnom Penh Commercial Bank (PPCBank).
Cambodia payment gateway
Serey further 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. Eventually, we hope to allow cross border payment through the Bakong system too.
Users will be able to set up a Bakong wallet that will be automatically linked to their bank accounts, allowing easy fiat currency exchange into the new CBDC in real-time.
NBC says it will store all transaction data from the platform, suggesting payments may be fully traceable.
Previous failed CBDC
Back in 2018, reports emerged of a Cambodian crypto project called Entropay. 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 (SECC) have denied such endorsements.
Cambodia’s Project Bakong is one of many CBDC and state-backed digital currency projects.
Nations like China continue to move forward with plans to release their own CBDC, usually as a counter to private digital currency projects like Facebook’s Libra.
major central banks of countries like Canada and Switzerland have teamed up with the Bank of International Settlement (BIS) to create a CBDC think tank.