The National Bank of Cambodia has announced the launch of „Bakong“, a Cambodian CBDC that it will not issue directly.
Bakong uses a mobile application to allow users to make transfers and payments via QR codes or phone numbers in KHR or USD
Cambodia is now the second country in the world to launch a Immediate Edge app after the Bahamas, ahead of Japan and China, whose CBDC trials are planned and underway respectively.
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Cambodia has announced the launch of its highly anticipated blockchain-based digital currency program called ‚Bakong‘.
Although Bakong was backed by the National Bank of Cambodia (NBC), it differs from a typical Central Bank Digital Currency (CBDC) in that it was not issued by NBC.
Nikkei Asia reports that Bakong is instead issued through several partner financial institutions in Cambodia under the supervision of NBC. The program will allow Cambodian residents with a smartphone to transact in Cambodian riel (KHR) or US dollars.
#CBDC #Fintech Cambodia officially launches central bank-backed digital currency
The “Bakong” electronic money, an initiative of the National Bank of Cambodia, joins a very small group of digital currencies supported by central banks that have become fully operational.
How it works
According to reports, Bakong is operating through a smartphone app that will function as a digital wallet, allowing users to transfer money and make payments using QR codes from phone numbers.
This will likely boost financial inclusion in a country which, according to the 2019 KPMG study , had only 5% of its population covered by conventional banking services.
In 2016, Cambodia’s mobile phone penetration rate was staggering 93.7% , while its smartphone penetration rate in 2020 was 58%, up sharply from just 20% in 2013. These figures phenomenal have been attributed to the influx of relatively inexpensive Android smartphones. Chinese brands like Huawei.
Speaking on October 28 at the Bakong launch in Phnom Penh, NBC central bank chief executive Chea Serey said the CBDC would not only boost financial inclusion and economic growth, but also help mitigate the spread of the new coronavirus.
He stated :
I hope that the official launch [of] Bakong today will help promote social welfare and prevent the spread of this disease by facilitating person-to-person electronic payment in a transparent manner without involving money.
The CBDC is taking over the world?
On October 21, BeInCrypto announced that the Central Bank of the Bahamas had launched the world’s first fully operational CBDC, the Sand Dollar .
According to the bank, the Sand Dollar is expected to make micropayments easy and cheap, as well as improve financial inclusion among the relatively underserved population of the Caribbean island.
There are also several regulatory conversations and CBDC test projects underway in China, Japan, South Korea, New Zealand, and the Eurozone .
On September 9, payments giant Mastercard revealed that it had launched a CBDC test platform for central banks around the world to assess their CBDC use cases.
Amid all this, Cambodia has now become the second country in the world after the Bahamas to launch a fully operational CBDC program after almost a year of testing, starting in July 2019.
According to reports, 20 financial institutions nationwide are participating in Bakong, with more expected to join as the project gains momentum.