The Cambodian government’s decision to kickstart a central bank digital currency project has proven to be a success, and would certainly prepare the country for an incoming global digitized economy.
The government launched its CBDC, called “Bakong” last October 2020. And since its launch, the digital currency has reached an astounding 5.9 million people throughout Cambodia.
In the first half of the year, “Bakong” has reached an impressive 1.4 million transactions, which is equivalent to US$500 million.
U.S. dollar’s dominance
Cambodia is awash with U.S. dollars, and the government wants to help its own currency, the riel, to regain a strong position in the country’s economy again. And the government realized that this goal can be achieved by introducing its own CBDC.
In fact, its CDBC project has become so successful that it is now considered by many as the most advanced CBDC in the world. Also, it is the only one in active use other than the Bahamas’ Sand Dollar which is, by the way, the first-ever CBDC project in the world.
In May this year, Cambodia’s SBI LY HOUR bank rolled out a blockchain-powered cross-border remittance service between Cambodia and Vietnam using the RippleNet network.
This has provided a high level of convenience for citizens because, in the past, they had to wait for several days before a recipient can receive his/her funds. But through this new service, funds can be received in real-time, thanks to the blockchain tech that runs behind it.
Serey Chea, assistant governor at the National Bank of Cambodia, praised the convenience that CBDCs can provide on cross-border payment transactions.
Cambodia’s “Bakong” cryptocurrency is expected to be a game-changer for the country, because of the speed and security it can provide.