The National Bank of Cambodia (NBC) will be one of the first central banks to use blockchain technology in its national payment systems for use by consumers and commercial banks, a new report by the World Economic Forum (WEF) stated.
The WEF report, How are Central Banks Exploring Blockchain Today? released last month, reveals that the Cambodian central bank hopes to implement blockchain technology in the second half of this year as an experiment in supporting financial inclusion and greater banking efficiency.
“The new blockchain-based payment system, in which consumers gain access via participating commercial banks, is designed to operate both with private mobile payment applications and commercial bank accounts, facilitating inter-operable retail payments between citizens and businesses, and encouraging citizens to open bank accounts, which support savings and financial stability,” it said.
Cambodia’s under-banked population currently uses cash – both the US dollar and the Cambodian riel – and a variety of mobile-phone based private payment applications to store and send money, the report says.
An NBC representative could not be reached on Tuesday for confirmation of the blockchain plan.
An NBC official had previously said that if the implementation of blockchain technology was proven successful, it would greatly enhance the central bank’s ability to facilitate and monitor interbank lending and transactions.
While blockchain technology allows for the use of cryptocurrencies – such as bitcoin – NBC director-general Chea Serey told The Post in 2017 that the technology would not at the time be used to support cryptocurrency. Rather, it would be used to reduce costs associated with interbank lending.
The WEF report revealed that the Kingdom’s domestic interbank system lacks highly efficient payment and settlement processes.
This opens the window for experimentation to improve upon and potentially “leapfrog” traditional wholesale interbank processes.