Cambodia’s central bank governor, Chea Serey, has expressed optimism about the country’s digital currency, Bakong, enhancing the use of traditional fiat currency. In a recent interview with Nikkei’s Future of Asia conference, Serey emphasized that the introduction of Bakong is not intended to replace the Cambodian riel or other fiat currencies but rather to complement and strengthen their usage.
Serey Says Bakong’s Primary Objective is To Integrate the Unbanked Population
Bakong, launched by the National Bank of Cambodia (NBC) in October 2020, is a blockchain-based digital payment system designed to facilitate seamless transactions in both riel and U.S. dollars. It aims to promote financial inclusion and modernize the country’s payment infrastructure. Since its launch, Bakong has seen significant adoption, with over 200,000 users and 6.8 million transactions by the end of 2023.
Serey highlighted that Bakong’s primary objective is to integrate the unbanked population into the formal financial system. Approximately 78% of Cambodians remain unbanked, relying on cash transactions that limit their access to financial services. By providing a digital platform for transactions, Bakong enables more people to participate in the formal economy, thereby boosting the circulation and use of fiat currency.
The governor also pointed out that Bakong offers a secure and efficient means of transferring money, reducing the dependency on physical cash and lowering transaction costs. This, in turn, enhances the overall efficiency of the financial system and promotes economic growth.
Moreover, Serey mentioned that Bakong’s interoperability with other payment systems allows users to transact seamlessly across different platforms, fostering a more inclusive financial ecosystem. The digital currency’s success has garnered international attention, with several countries exploring similar initiatives to enhance their financial systems.
While the central bank acknowledges the potential risks associated with digital currencies, such as cybersecurity threats and the need for robust regulatory frameworks, it remains committed to ensuring the safe and effective implementation of Bakong. The NBC continues to work closely with financial institutions and technology partners to address these challenges and enhance the system’s resilience.