The Central Bank Governor of Cambodia, Chea Serey, recently unveiled the potential of the Central Bank Digital Currency (CBDC) Bakong in increasing the adoption of Cambodia’s Riel currency through cross-border QR payments. This development signifies a significant shift in the country’s currency system and could have far-reaching implications for the economy.
Despite efforts to promote the use of the Riel in local transactions, over 80% of Cambodia’s economy still relies on the U.S. dollar as part of a dual-currency system. However, in digital transactions, the Riel has been gaining traction, with the Bakong CBDC playing a key role. Since its inception in 2020, Bakong has facilitated a total of $70 billion in digital payments as of 2023, showcasing its impact on the economy.
One of the key features of Bakong is its ability to facilitate cross-border payments, particularly through QR code-based transactions with neighboring countries like Thailand, Laos, and Vietnam. This not only promotes the use of the Riel but also enhances financial integration within the region. The exclusive use of the Riel in cross-border transactions emphasizes the importance of having a Riel Bakong account for seamless transactions.
Unlike other CBDCs, Bakong is backed by both the Cambodian Riel and the U.S. dollar, providing stability and broader usability within Cambodia’s unique dual-currency system. This dual support ensures smoother transactions and financial integration, making Bakong a valuable asset for the Cambodian economy.
Looking towards the future, Cambodia has plans to launch cross-border payments using Bakong CBDC with India and is exploring potential collaboration with Japan. By partnering with technologically advanced countries, Cambodia aims to enhance Bakong’s functionality, efficiency, and security. Such collaborations could bring technical expertise and innovations that make the Riel more attractive to both domestic and international users.
The introduction of the Central Bank Digital Currency Bakong has the potential to significantly impact Cambodia’s economy by promoting the use of the Riel, facilitating cross-border transactions, and strengthening financial integration within the region. As Cambodia continues to explore new partnerships and collaborations, the future looks promising for the adoption and expansion of CBDCs in the country.