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

  • Massive stingrays may live in Mekong’s deep pools

    US scientists have suggested that unexplored deep pools in the Mekong River in an area of Stung Treng could potentially be home to significant populations of giant freshwater stingrays, one of the world’s largest freshwater fish species. This comes as a fisherman hooked a 180

  • PM takes time to meet, greet Cambodians living in the US

    After landing in the US ahead of the ASEAN-US Special Summit, Prime Minister Hun Sen was received by over 1,000 Cambodian-Americans including political analysts who welcomed him with greetings, fist bumps and selfies. Hun Sen also met with analyst Mak Hoeun, who had allegedly spoken ill

  • PM heads to Washington for ASEAN-US special summit

    Regional and international issues and how to bring the ASEAN-US partnership to another level will be discussed at length as Prime Minister Hun Sen and his ministers arrive in Washington, DC, for a special summit on May 12-13. During the trip, Hun Sen and ASEAN

  • National Assembly refutes EU resolution

    The National Assembly (NA) has hit back at a European Parliament resolution condemning the political and human rights situation in Cambodia, calling it another display of the Parliament’s “double standards”. Key points of the resolution include a warning that the Parliament could exclude the

  • Soaring global fuel prices: an opportunity for Cambodia?

    Cambodia is feeling the squeeze from the soaring global coal and oil prices. Electricity du Cambodge (EDC)would certainly be hurting from this reality, and most likely re-assessing its plans to add more coal power stations. EDC buys half of Cambodia’s electricity from plants

  • PM reflects on shoe throwing: Free speech or act of violence?

    Prime Minister Hun Sen on May 17 questioned whether a man who threw a shoe at him while he was in the US was exercising freedom of expression or if it was an act of hostility. Hun Sen was referring to an incident last week when