The National Bank of Cambodia (NBC) is looking into expanding its Bakong blockchain-based payment system’s operations to countries in Asia, Africa, Latin America and Europe to boost tourism, investment, trade and inbound remittances from overseas Cambodian workers as well as to encourage the use of the local currency.
NBC deputy governor Chea Serey disclosed this at a seminar in western Kampong Thom province’s Stoung district last week that focused on financial literacy as well as the Cambodian real and Bakong system. The quasi-central bank digital currency (CBDC) was developed by Japanese blockchain company Soramitsu Co Ltd and launched on October 28, 2020.
Serey revealed that the NBC has been working with Asian, African, Latin American and European nations to increase the scope of payment systems that are regarded as quick, secure and low-cost to promote cross-border economic activities.
Cambodia has been linked with Thailand and Malaysia through Bakong, with connections to Vietnam, Laos, Myanmar, China and India still in the works, she said.
Serey explained that the platform enables Cambodians in Thailand to scan and pay using riel-denominated accounts as well as Thais in Cambodia to scan and pay in the local currency, which she said would promote use of the riel.
She boasted that Bakong has made it possible for less-affluent rural residents to access and benefit from formal financial services.
Bakong has received several awards, with Japanese Prime Minister Fumio Kishida last month hailing the system as an example of “model” international cooperation, namely between the Cambodian central bank and a Japanese tech firm, she added.
Cambodia Post Bank Plc (CPBank) CEO Toch Chaochek lauded the Bakong expansion plans, saying that the system would streamline the payment process, especially for investors, tourists and workers employed abroad.
“I find that KHQR code payments are becoming increasingly popular among our people as they grow more aware of its convenience,” he said, referring to a universal QR code standard for retail payments in Cambodia that the NBC launched on July 3, 2022 following a pilot run.
On June 6, the NBC and Bank of Thailand (BoT) formally rolled out Phase II of their cross-border QR (Quick Response) code payment system, 1,204 days after the launch of the first phase on February 18, 2020.
The system currently enables KHQR payments to 7.6 million merchants in Thailand and ThaiQR payments to 1.5 million merchants in Cambodia, according to a statement posted on NBC deputy governor Chea Serey’s official Facebook page on June 6.
Meanwhile, the central bank reaffirmed in its Annual Supervision Report 2022 that e-payment trends in Cambodia have greatly consolidated in recent years as more and more people switched from cash-based to digital transaction options.
By end-2022, “the number of registered e-wallet account[s] increased to 19.5 million and the total number of transactions jumped from 708 million to one billion with a total amount of $272.8 billion (increased by 34 per cent), approximately nine times the [GDP]”, the report said.