Cambodian Central Bank Officially Launches Digital Currency

Officially unveiled a Central Bank-backed digital currency on Wednesday building on blockchain technology developed by a Japanese corporation.

The "Bakong" e-money, a project of Cambodia's National Bank, joins a relatively small number of digital currencies backed by central banks that have gone fully operational.

Bakong is intended to help Cambodians make transfers and move money between individuals using their smartphones, which facilitates transactions in the dollar and riel, the Cambodian currency.

The e-money can be accessed by the smartphone-installed mobile app. Although there is limited number of Cambodians with conventional bank accounts, smartphones have entered every corner of Southeast Asian region.

Chea Serey, general director of central banking at the National Bank of Cambodia, expressed hope at Wednesday's launch event in the capital Phnom Penh that the e-money would play a role in preventing the spread of COVID-19, the disease caused by coronavirus.

"I hope the official launch of Bakong system today will help to promote social welfare and also prevent the spread of that disease through facilitating e-payment from person to person seamlessly without involving cash," she said.

Bakong was named after an ancient temple of significance in the region.

The framework was developed by Japanese financial technology company Soramitsu Co.

Last year the Central Bank started using its pilot in July. Around 20 financial institutions have taken part in the project so far, with thousands more planned to participate.

By checking QR codes or tapping into phone numbers, users of the mobile app can make payments and move money from their e-wallets.

Pen Chenda, a senior official of the Cambodian Association of Finance and Technology, said Bakong would help small enterprises in particular because of the costs and uncertainties involved with cash handling.