Cambodia launches inter-banking platform that runs on blockchain

Amid a global race toward central bank digital currencies, or CBDCs, Cambodia officially launched a blockchain-based platform for digital money transactions called Bakong. 

“Bakong, a payment and money transfer service through banks or microfinance institutions, was established under the initiative of the National Bank of Cambodia,” said an article from Dap-News on Oct. 28. The Asian country’s central bank collaborated with a number of entities on the project.

Bakong first secured involvement from Cambodian financial giant PRASAC in October 2019. In January 2020, Cambodia’s central bank forecast the platform’s launch, revealing the system as a closed circuit enterprise. 

“Bakong is a new and modern payment tool that allows customers to make interbank transactions and bill payments easily, quickly, securely and free of charge,” PRASAC’s executive vice-president, Sony Say, said, as quoted by Dap-News.

“I hope the official launch of the Bakong System today will help promote social welfare and also prevent the spread of [Covid-19] by providing seamless e-payments from person to person,” Cambodian central bank director general, Chea Serey, said, as reported by The Phnom Penh Post on Oct. 28. “Online payments can also be made through Bakong System, which also offers alternative options for … transactions such as deposits, withdrawals, sending and receiving [via] e-wallet.”

The Phnom Penh Post article clarified, however: 

“In response to rising concerns domestically and internationally, Serey stressed that Bakong is not a Central Bank Digital Currency.” 

Although the news does not definitively confirm the presence of an actual CBDC, the global race toward each country’s version of such an asset remains a hot topic. The U.S. has taken a slower approach when it comes to a national digital currency, aiming for accuracy over speed.