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Cambodia: Bakong top in digital currency index
Cambodia’s digital retail ecosystem was ranked first in Asia and second globally in the PricewaterhouseCooper (PwC) inaugural Central Bank Digital Currency (CBDC) Global Index.
“Looking at the most advanced projects globally, retail efforts have already produced two live projects in the Bahamas and Cambodia,” the report said.
“No interbank/wholesale CBDC projects have reached this maturity level yet. However, nearly 70 percent of declared wholesale projects are already running pilots, while only 23 percent of retail projects reached this implementation stage,” PwC added.
Retail, interbank and wholesale CBDC differ in that the latter allows users to link securities or forex programmes directly with cash platforms.
Cambodia’s Bakong project, while not being a CBDC, is a digital payment system that allows for payments, deposits and cash transfers in a tokenised versions of the US Dollar or riel, which was recognised by PwC.
The Bahamas with its “Sand Dollar” ranked first, scoring 92 out of 100, while mainland China came in third with 75. Ukraine, Uruguay and Ecuador tied for fourth place, scoring 71 each.
The National Bank of Cambodia (NBC) began exploring the digital currencies in June 2018 and announced it began officially testing the tokenised digital currencies in June 2019 before officially launching it in October last year.
“Bakong aims to increase financial inclusion, in a country where most citizens are not accustomed to using bank accounts but mobile phone utilisation is high. It also allows interbank, real-time electronic transactions and promotes transactions in Cambodian riels, compared with today where the bulk of transactions are in US dollars,” the report said of the blockchain-based mobile application.
“Bakong will support rural financial sector development, easing access to credit for SMEs [small and medium-sized enterprises] and will provide targeted lending for micro entrprises,” PwC added.
Chea Serey, director-general at the National Bank of Cambodia, previously said the app would help foster financial inclusion, while also promoting the use of the riel. She has expressed enthusiasm that the technology will help foster greater innovation in the financial realm, while also easing the burden for migrant workers sending remittances back home.
“Bakong is Cambodia. It plays a central role in placing all players who use their payments under the same platform, making it easier for users to cross boundaries and banks to pay each other,” Chea said.
PwC noted that 88 percent of CBDC projects at the pilot or production stage use blockchain as an underlying asset. It said the technology permits would help to trigger programmable monetary instruments and result in transparent audit trails.
Richard Yim, the founder of Demining Robotics and the forthcoming Museum of Modern Technology in Phnom Penh, told Khmer Times Bakong was a landmark initiative that would help spur foreign direct investments and help lure tech startups to the Kingdom.
Yim, who is also an adviser to the government said, “Bakong can be an example that other countries can look at replicating. Bakong is a government-backed initiative and it will play a major role shaping Cambodia’s financial market. While other banks are hesitating to implement or adopt crypto systems, Bakong can bring Cambodia to the forefront and, with the right execution, will serve as an example to other countries looking to implement the system.”
Source: https://www.khmertimeskh.com/50842250/bakong-top-in-digital-currency-index/