Cambodia's central bank won’t recognise bitcoin as a form of payment, making the Kingdom the latest Asian country to reject the digital currency.
National Bank of Cambodia director-general Chea Serey confirmed the regulator’s stance on the issue on Wednesday, citing the absence of any e-commerce law in the Kingdom as one of the main reasons.
“NBC will not recognise a currency that is not issued or backed by a government. Bitcoin’s issuer is not a central bank of any jurisdiction,” Serey said.
Serey said that the lack of pertinent regulations means consumers aren’t legally protected in case of fraud, “which has proven to be a daily occurrence in the virtual world”, she added.
The NBC is the only organisation in Cambodia with authorisation to issue legal tender under the direction of the Ministry of Economy and Finance.
The NBC’s statement comes one day after the Bank of Thailand (BOT) issued a stern warning against buying bitcoins. The BOT yesterday said tracking the virtual money could pose difficulties, especially during legal proceedings.
Bitcoin continues to be traded in Thailand, however, despite the BOT stating that the government would not and cannot regulate the digital currency.
Last month, Vietnam’s banking regulator banned commercial banks and vendors from using or allowing bitcoin as a legitimate form of payment or trade. Prior to that, China, Japan and Russia took similar steps to discourage the digital currency’s official use.
Singapore, meanwhile, is reportedly investigating ways to regulate the so-called crypto-currency, of which there are an estimated 11 million in circulation worldwide.
On March 1, local Cambodian businessman Ki Chong Tran submitted a grant proposal to the Bitcoin Foundation asking for $100,000 of the digital currency in order to establish a local market in Phnom Penh, including two bitcoin ATMs.
The 26-year-old 3D-printing business owner and martial-arts trainer said the NBC’s comments would have no effect on the success of bitcoin in Cambodia.
“The purpose of bitcoin is to operate outside of government regulation and be self-regulated by its users. The NBC’s stance on bitcoin will not have an effect on its popularity here in Cambodia,” he said.
Anthony Perkins, CEO of Cambodia’s largest third-party electronic payments firm, Wing, said the NBC’s concerns were justified and that much more is at stake than just an alternate means of payment.
“Anything that affects the money supply outside of their (NBC’s) control could lead them to make a wrong decision on money supply, which in turn affects the nation’s interest rates, output, inflation, unemployment and so on. So there is a lot at stake if bitcoin usage becomes widespread in a country,” Perkins said.
Citing the bankruptcy of Japan’s Mt. Gox bitcoin exchange last month, Perkins said users face considerable financial risks, and that the digital currency fails to address tax evasion, money laundering and counterterrorism financing laws.
“The bottom line is, consumers want a payment solution that is simple to use, safe, and universally accepted. Bitcoin does not tick any of those boxes in Cambodia yet,” he said, adding that things could change if regulators start to embrace bitcoin.
“But I honestly cannot see that happening anytime soon.”
The Ministry of Economy and Finance could not be reached for comment.