Chea Serey, governor of Cambodia’s central bank, has disclosed Bakong CBDC’s involvement in facilitating cross-border QR payments using Riel.
The Cambodian Riel (KHR) may see an uptick in circulation if Bakong, the digital currency of the Cambodian central bank, were to facilitate cross-border QR payments, according to Central Bank Governor Chea Serey’s May 28 statement. According to Serey, who was speaking at the Future of Asia event in Tokyo for the Nikkei, Cambodia’s monetary system is everything from traditional.
In a two-tiered monetary system, she noted that the U.S. dollar continues to dominate the economy, which accounts for more than 80% of the total, while the interview was underway. The government is aiming to expand the usage of Riel for everyday transactions, according to Serey.
The Bakong CBDC has enabled digital payments totaling $70 billion since its introduction in 2020. By 2023, this amount would have almost doubled Cambodia’s GDP. The Bakong accepts both Riel and USD for domestic transactions; nonetheless, USD accounted for $20 billion of last year’s total, which is double the sum from 2022.
The goal of international transactions is vital to the Riel’s popularization, says the Central Bank Governor. The most remarkable is the fact that UnionPay of China and other nations accept Bakong as a QR code payment method in Cambodia and neighboring countries, including Vietnam, Laos, and Thailand.
Since Riel is the only currency accepted for these cross-border payments, Cambodian clients must create Riel Bakong accounts in order to do business with these nations. Customers who do not accept Cambodian Riel will not be able to use QR codes to buy things from Thai visitors.
The Bakong is unique among CBDCs due to its backing by both the Cambodian Riel and the US dollar. In the context of the Kingdom of Cambodia’s bi-currency, these two backings provide stability and produce more widespread application, allowing for larger transactions and better integration.
Bakong CBDC cross-border payments with India would be launched by June 2024, according to Governor Serey. Possible cooperation with Japan is another area of interest for the central bank. An official from Cambodia’s government said, “We are willing to cooperate with other nations having major people mobility with Cambodia.”
She advocated for the integration of suitable technologies into the Bakong payment system with the help of other technologically advanced nations, such Japan.
The wholesale CBDC was introduced by the Hong Kong central bank in March 2024 with the aim of strengthening the city’s financial sector. The South Korean central bank also intends to test the digital Korean Won (KRW) by the end of 2024 in order to assess its usability and deposit function.
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