The Phnom Penh Post reports that within the next couple or more months, Cambodia’s central bank is going to launch its own blockchain-based peer-to-peer money platform.
The system is called Project Bakong and it will be a central bank digital currency (CBDC) – backed payments app. Chea Serey, the chairman of the National Bank of Cambodia, said it’s going to be “the national payment gateway for Cambodia”. At the moment, the Bakong implementation is linked to users’ bank accounts, and it will allow the exchange between the CBDC and hard currency.
Bakong Cheaper than Debit and Credit Cards
An executive from one of the participating banks at the project said Bakong is a more convenient and cheaper alternative to debit and credit cards. It was also noted that banks are going to lose from their market share, but not in the long run.
Bakong Being Tested Since July 2019
Bakong has been undergoing tests ever since July 2019. The central bank expects it to be completely operational until this quarter ends. The system is currently supported by 11 banks, not to mention it will be rolled out in all the bank branches in the country very soon. According to a December World Economic Forum release, Bakong is looking to connect a payments economy that has been fragmented and continues to be dominated by cash.
Payments Frictions Reduced and Financial Inclusion Achieved
The National Bank of Cambodia’s new system will have merchants, commercial banks and the Cambodian people that don’t have a bank reducing payments frictions so that the country gains financial inclusion. Earlier this week, it was reported by Hard Fork that a European central banks’ raft which included the Bank of International Settlements has started to explore how CBDCs would work with international payments and how much they would help when it comes to interoperability.