2020 is shaping up to be an excellent year for the adoption of digital currencies. The latest reports reveal that the National Bank of Cambodia will launch a new digital currency in the first quarter of 2021, dubbed Bakong.
Authorities confirm that Bakong is entirely a central bank digital currency (CBDC). It was launched in July for a trial basis throughout Cambodia. The director-general of the National Bank of Cambodia, Chea Serey, says that this system will be operational within the current fiscal quarter.
According to Serey, the Bakong is “the national payment gateway for Cambodia.” He added:
“Bakong will play a central role in bringing all players in the payment space in Cambodia under the same platform, making it easy for end-users to pay each other regardless of the institutions they bank with. Eventually, we hope to allow cross border payment through the Bakong system too.”
Bakong is a closed system as opposed to many of the other blockchain-driven cryptocurrencies. The CBDC is a closed system that will be backed by the banking authorities. Once it becomes active, a software wallet will be linked to every user’s bank account. That will enable them to interact with the hard currency of the country readily.
The new system will support real-time transactions. On the other hand, the National Bank of Cambodia stores centralized records everything about where the money goes. This new development is a slight adjustment to the country’s previous heading on crypto and blockchain technologies.
Cambodia had recently issued various needs for a crypto business license. One Cambodian crypto exchange became the pioneer of such a licensed company in August 2018.
In any case, the at-scale use case of a national bank granting its customers the ability to transact with one another using blockchain authentication appears guaranteed to accelerate adoption.