Countries around the world are starting to release guidance for central bank digital currencies (CBDCs), and Cambodia is the latest to join the fray.
Cambodia Working on CBDC
Cambodia has announced that it is currently working on issuing a government-backed cryptocurrency within a few months. The cryptocurrency will fuel a blockchain-based, peer-to-peer payment, and money transfer platform. According to the official announcement, this latest development comes under ‘Project Bakong,’ and the system is set to go live in a few months.
A report from local media house, Phnom Penh Post, mentioned that the CBDC has already received the support of 11 banks in the country and are more are set to join the movement shortly.
The director-general of the National Bank of Cambodia (NBC), Chea Serey,stated that Project Bakong started in July last year. She pointed out that the scheme will begin to work within the first fiscal quarter of the year. While reports claim the coin will be a quasi-form of a CBDC, Serey mentioned that it would serve as the national payment gateway for Cambodia.
She added that the Bakong project will play a core role in providing a central platform that will bringall players in the payment space together. As a result of this, it will become a lot easier for end-users to pay each other, irrespective of the different institutions they bank with. Serey also went on to say that they are hoping to expand their services to enable cross border payments through the Bakong system.
The support the scheme has received has been impressive so far. The Phnom Penh Commercial Bank (PPCB), one of the private banks helping within the project, is currently working on deploying the system in all its branches across Cambodia. The PPCB President, Shin Chang Moo, stated that Bakong is cheaper and more convenient to use compared to the traditional payment and money transfer systems like mobile platforms and credit cards.
While there are fears that the CBDCs and other cryptocurrencies will see banks lose market share, Chang Moo believes that the project will lead to the establishment of a more inclusive financial ecosystem in the future. This will be beneficial to all stakeholders in the industry, he added. Bakong is an excellent idea as the financial sector in Cambodia is still immature in terms of the number of service providers and users, Chang Moo remarked.
Japan Should Be Ready To Issue CBDC: BOJ Deputy Governor
China has been leading the way with the development of its digital Yuan. However, more countries in Asia are looking towards this direction. The Bank of Japan’s (BoJ) Deputy Governor Masayoshi Amamiya recently stated that although Japan doesn’t have an immediate plan to issue a CBDC, they should be ready to do so in the near future.
Amamiya noted that innovation in the technological sphere is extremely fast and he is expecting that as the world of settlement systems evolve and start to become part of society, public demand for CBDCs is expected to gain huge momentum in Japan.
While Japan is yet to commit to developing its CBDC, China has been leading the continent and, in fact, the world, in the development of its own cryptocurrency. China has been working on its CBDC for five years now and stepped up efforts following the announcements of private projects like Facebook’s Libra.
The People’s Bank of China (PBOC) will soon start trials of its digital Yuan, with four state-owned commercial banks and three telecom companies set to partake in the experiment.