This article is posted at The European Sting and is written by the Co-founder and CEO of Soramitsu, a Tokyo-based 2016 startup that specializes in blockchain technology solutions. It is another in a growing list of pieces written on CBDCs.
In this case it is the Cambodian central bank’s development of the Bakong, which has been in use since late in 2020. The article states that the National Bank of Cambodia (NBC) developed the Bakong system in conjunction with Soramitsu using the Hyperledger Iroha blockchain framework. We recently highlighted on these pages the cross-border initiative between Cambodia and Malaysia, in which users of Bakong can receive real-time cross-border payments from certain Malaysian residents. The author goes on to discuss blockchain development in general, and its broader uses beyond cryptocurrencies. Then the article moves into the benefits of CBDCs, so it is a real advocacy piece, which one might expect. Readers with interest in blockchain and CBDCs can take the five minutes or so to absorb what’s going on in some of the smaller markets.
‘Japan’s Nikkei newspaper recently reported on the successful implementation by the National Bank of Cambodia of Bakong, the digital currency (named after a temple of the ancient Khmer Empire). It was launched in October of 2020 to help strengthen the Khmer riel and reduce dependence on the US dollar….This plan has proven successful; there are currently over 200,000 users of the Bakong digital wallet, while more than 5.9 million users have benefitted indirectly through the use of online banking apps connected to the system….According to Nikkei, more than 1.4 million Bakong transactions were recorded in the first half of 2021 alone, with a total value of around $500 million. This is proof that through a hybrid use of traditional electronic banking and the implementation of an innovative digital wallet, such as those used in decentralized finance, users of banks as well as underserved citizens stand to benefit…The National Bank of Cambodia (NBC) developed the Bakong system along with Japanese technology company Soramitsu using the open source Hyperledger Iroha blockchain framework. The flexibility of using a blockchain for digital asset management allowed NBC and Soramitsu to implement fiat-backed digital representations of the Khmer riel and US dollar that would be accessible for wholesale interbank transactions as well as everyday retail payments.’
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group