Logo of Phnom Penh Post newspaper Phnom Penh Post - NBC signs blockchain agreement

NBC signs blockchain agreement

Content image - Phnom Penh Post
A street view of the National Bank of Cambodia headquarters in Phnom Penh. Heng Chivoan

NBC signs blockchain agreement

The National Bank of Cambodia (NBC) has signed an agreement with a Japanese firm to develop a blockchain-based payment system that could potentially allow for the regulated usage of a cryptocurrency, which would eliminate the use of formal financial institutions to send and receive money.

According to an announcement on Friday from the Japanese financial technology firm Soramitsu Co, the company signed a partnership agreement with the NBC to study the possible implementation of a blockchain-based open-development software known as Hyperledger Iroha, a product backed by the Linux Foundation, a US-based company that distributs the ledger technology program.

A distributed ledger, also known as a blockchain, allows for the use of digital currencies such as bitcoin, but provides greater verification safeguards for transmitting digital assets and currencies. Based on open-source software, the technology claims to be more robust in preventing cyberattacks by creating a shared ledger that is recorded by all individuals or institutions that access the network.

The central bank could not be reached for comment yesterday about the scale of the agreement or its level of commitment towards its implementation. Nevertheless, the NBC’s commitment joins a growing rank of countries that include central banks from China, England, Australia, Singapore and Sweden that are actively investigating how the technology can be incorporated.

“Through our work with the National Bank of Cambodia, we will be able to take the first step towards creating a more efficient payment infrastructure, which we hope to expand globally in the future,” Kazumasa Miyazawa, CEO of Soramitsu, said in the announcement.

The technology would bypass the need for ATMs and formal financial institutions for customers by allowing them to send and receive funds directly, while central banks and physical financial institutions could use it for streamlined interbank lending activity, according to Martin Kendrik, the founder of the Cambodian Cryptocurrency, Bitcoin and Blockchain Community.

“While I am a bit surprised that Cambodia is potentially pursuing blockchains so quickly, it is good for the central bank to be progressive and not regressive and follow models like Japan and Singapore,” he said. “If Cambodia invests in this technology, it would put them in a strong position to insulate themselves from external currency shocks.”

MOST VIEWED

  • Hun Sen asks Cambodians to believe in government

    Prime Minister Hun Sen on Monday asked citizens and investors to trust that the government will overcome the challenges brought about by Covid-19 and the loss of the EU’s Everything But Arms (EBA) scheme. Speaking to reporters at the Peace Palace in Phnom Penh,

  • Westerdam passenger ‘never had’ Covid-19

    The US Centres for Disease Control and Prevention (CDC) said the US citizen that allegedly tested positive in Malaysia after travelling on the Westerdam was never infected with Covid-19 in the first place. In an article published in the newspaper USA Today on Friday, CDC

  • ‘Ghost staff’ found, $1.7M returned to state coffers

    The Ministry of Civil Service said more than seven billion riel ($1.7 million) in salaries for civil servants was returned to the state last year after it discovered that the books had been cooked to pay ‘ghost officials’. This is despite claims by the Ministry of

  • Woman wanted for killing own son

    Police in Phnom Penh’s Meanchey district are on the lookout for a woman who allegedly hacked her son to death on Sunday in Stung Meanchey III commune. District police chief Meng Vimeandara identified the son as Chan Sokhom, 32. “The offender can’t escape forever.

  • Tragedy as four lions devour teenager in Pakistan safari park

    In a horrifying incident at an animal park in the Pakistani city of Lahore, four lions killed a 17-year-old grass reaper. However, how Muhammad Bilal Hussain managed to get near the lions was yet to be ascertained. Safari officials said Hussain climbed a 3.7m high

  • H5N1 also poses deadly threat, ministry warns

    The Ministry of Health’s Communicable Disease Control (CDC) department has called on citizens to excise caution over H5N1 or bird flu that is spreading in the southern province of Vietnam. In a Facebook post, the department announced that it has made a series