Unlocking the Potential of Cambodia’s Central Bank Digital Currency (CBDC)
The Central Bank Governor of Cambodia, Chea Serey, recently shared insights into how the Central Bank Digital Currency (CBDC) Bakong is poised to revolutionize the adoption of the country’s Riel currency. During an exclusive interview, she emphasized the role of Bakong in facilitating cross-border QR payments and promoting the use of the local currency for both domestic and international transactions.
The Dominance of the US Dollar in Cambodia’s Economy
- Cambodia heavily relies on the US dollar, which accounts for over 80% of its economy in a dual-currency system.
- Efforts are being made to encourage the use of the Riel for local transactions, with digital transactions showing a preference for the local currency.
The Impact of Bakong CBDC on Digital Payments
- Since its inception in 2020, Bakong CBDC has facilitated $70 billion in digital payments, doubling the country’s GDP.
- Domestic transactions in Bakong can be conducted in both Riel and US dollars, with the Riel accounting for a significant share of the total transaction volume.
Cross-Border Payments and the Role of Bakong
- Bakong plays a crucial role in promoting the use of the Riel in cross-border transactions, with a focus on QR code-based payments.
- Transactions between Cambodia, Thailand, Laos, Vietnam, and China’s UnionPay are exclusively conducted in Riel, fostering the adoption of the local currency.
Unique Features of Bakong CBDC
- Bakong stands out from other CBDCs as it is backed by both the Cambodian Riel and the US dollar, providing stability in a dual-currency system.
- This dual support enhances the usability of Bakong, contributing to smoother transactions and financial integration within Cambodia.
Global Expansion and Collaboration
- Cambodia is exploring partnerships with countries like India and Japan to initiate cross-border payments using Bakong CBDC.
- Potential collaborations with technologically advanced nations could enhance the functionality and appeal of Bakong, making the Riel more attractive to a diverse range of users.
Hot Take: Embracing Innovation for Financial Inclusion
As Cambodia’s Central Bank embarks on a journey towards digital transformation with Bakong CBDC, the potential for financial inclusion and economic empowerment is immense. By leveraging cutting-edge technology and strategic partnerships, Cambodia is paving the way for a more inclusive and efficient financial ecosystem that benefits both the local population and international stakeholders.
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