Cambodia’s central bank chief says digital currency will bolster local fiat

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As a crypto investor with a keen interest in emerging markets and digital currencies, I find the developments surrounding Cambodia’s digital currency, Bakong, particularly intriguing. The potential for cross-border QR code payments to boost the use of the riel is an exciting prospect, not only for Cambodia but also for the broader crypto community.

As a financial analyst, I can tell you that the implementation of cross-border QR code payments using Cambodia’s digital currency is expected to increase the utilization of the riel, based on the central bank governor Chea Serey’s statements.

As a analyst, I would rephrase it as follows: The new digital currency, Bakong, introduced by the National Bank of Cambodia, is set to enhance the usage of the riel currency within the country. This is achieved through facilitating seamless cross-border QR payments, according to Chea Serey, the governor of the National Bank of Cambodia, in her conversation with Nikkei Asia.

During the interview, Serey shared that approximately 80% of Cambodia’s economy functions with the U.S. dollar under a dual-currency system. However, government officials aim to enhance the role of the riel, especially in digital transactions where its usage is more prevalent.

Expanding the usage of riel in cross-border transactions is crucial, according to Serey. Currently, Bakong facilitates QR code-based payments among Cambodia, Thailand, Laos, and Vietnam, and is in harmony with China’s UnionPay. The value of digital transactions processed through Bakong had reached an impressive $70 billion by 2023, which is close to doubling Cambodia’s gross domestic product, the report indicates.

As a financial analyst, I’d describe Bakong as follows: Launched in 2020, I’m part of this innovative payment system designed to simplify transactions for individuals and businesses alike. Contrary to popular belief, Bakong isn’t just another digital currency; instead, it’s unique because it’s backed by both the Cambodian riel (KHR) and the U.S. dollar (USD) held in the reserves of the National Bank of Cambodia.

Serey acknowledged the intricacies involved in globalizing digital currencies, requiring the harmonization of various technologies among nations to tackle issues like capital transfers and customer identification procedures. In the future, the central bank intends to initiate cross-border payments with India by June and is also pursuing similar partnerships with Japan, according to Serey’s disclosure.

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2024-05-28 13:03