As a seasoned analyst with extensive experience in the global financial market, I find this latest move by Cambodia’s National Bank (NBC) to be a prudent step towards embracing digital assets, albeit cautiously. Having closely observed the crypto landscape and its evolution, I can appreciate the NBC’s concern about unbacked tokens like Bitcoin and Ethereum due to their volatility and potential links with illicit activities.
The Cambodian National Bank has granted approval to commercial banks and digital payment companies to offer cryptocurrency-related services; however, these services do not extend to Bitcoin and other cryptocurrencies that are not backed by any asset or resource.
Based on the Phnom Penh Post report, it was announced on December 27th that banks could now offer services related to Category 1 cryptocurrencies. These are digital assets backed by traditional currencies, such as stablecoins like USD Coin (USDC) and Tether (USDT), along with central bank digital currencies.
In other words, it is still illegal for Bitcoin (BTC), Ethereum (ETH), and individual digital currencies to be used in Cambodia.
Under this new regulation, commercial banks and digital payment companies must first secure approval from the central bank before offering any crypto-related services. With authorization granted, these financial entities can exchange cryptocurrencies for traditional currencies and vice versa. They will also be permitted to manage cryptocurrency transfers between accounts and provide storage solutions.
In other words, it’s forbidden for financial entities to utilize their clients’ cryptocurrency holdings for personal gain.
Prior to the NBC announcement, it was forbidden for Cambodian residents to engage in cryptocurrency transactions or trading because of concerns over the unpredictable fluctuations of digital currencies, as well as a common belief that cryptocurrencies are often used for illegal activities like money laundering and fraud.
By making this significant step, it’s clear that Cambodia is gradually embracing the world of cryptocurrency, mirroring a global shift observed in nations like Hong Kong, the United States, and the UAE. However, it’s important to note that compared to these countries, Cambodia is currently just starting out in this field.
Recently, it was announced that Cambodia has prohibited the functioning of 16 significant cryptocurrency trading platforms such as Binance, OKX, and Coinbase. These platforms did not obtain licenses from Cambodia’s Securities and Exchange Commission, a requirement for conducting business within the country.
As a researcher, I’ve observed that while Cambodia maintains a measured approach towards cryptocurrencies in general, there appears to be a gradual movement towards digital currencies that are linked to traditional fiat money. Intriguingly, the Governor of the National Bank of Cambodia, Chea Serey, has expressed her optimism about how such digital currency could bolster the strength of the Cambodian riel and reduce our dependence on the U.S. dollar.
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2024-12-27 16:52