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As the recognition and use of cryptocurrencies increases, there are reports that central banks use cryptocurrencies and blockchains from all over the world. In a current statement from the Central Bank of Cambodia, it was claimed that the bank started using a new blockchain-based payment system.
The payment system, based on the Hyperledger Iroha network, was developed in partnership with the Japan-based blockchain company Soramitsu. It is claimed that the payment system called Project Bakong was actually presented at a conference held earlier this year. Chea Serey, one of the CEOs of the Central Bank of Cambodia, defined this platform as the “backbone of the payment system” at the conference.
Can dollarization be reduced in Cambodia?
Serey added that the project has two goals. The first goal is to make Cambodian-born migrant workers better able to send money home, while the second is to get people to use more fiat money. 90% of the Cambodian economy uses US dollars and has undergone full dollarization. Cambodia even considered launching its own crypto currency for this reason, but there were no serious advances in this regard.
The new payment system is easy to use. More than 20 banks participated in the project in Cambodia and users only need to go to one of them and register. A government issued ID and mobile phone number are required to register. Serey believes that this payment platform will increase social welfare and reduce the spread of the Coronavirus disease. In fact, many officials have emphasized that the spread of the disease will decrease with the transition to digital payments.
The fact that people use cash and its circulation is definitely spreading the disease further.
