NBC expanding Bakong operations to more Asian countries
In a bid to promote cross-border economic activities using local currencies, the National Bank of Cambodia (NBC) is expanding the operations of its Bakong blockchain-based payment system to Vietnam, Laos, Myanmar, China, and India.
The aim of expanding Bakong to foreign countries is to promote the use of local currency instead of the US dollar in trade and investment between trading partners, Chea Serey, Deputy Governor of NBC said.
“Regarding the blockchain-based payment system, Cambodia has connected Bakong with Malaysia and Thailand and currently is in a stage of expanding the system to Vietnam, Laos, Myanmar, China, and India,” Serey said at a seminar on financial literacy, Cambodian real and Bakong system in Kampong Thom province’s Santuk district on Friday.
Cambodia and Thailand launched the second phase of their cross-border QR payment system phase II after the start of the first phase on February 18, 2020.
Currently, Cambodians can scan payments in Thailand from their riel-dominated accounts in Cambodia, and Thais can also scan payments in riel in Cambodia.
“This mechanism requires Cambodian buyers and sellers to have riel-dominated accounts, which in turn promotes the use of the riel currency in Cambodia,” she said.
KHQR is a universal quick response (QR) code system created for retail payments in the Kingdom and cross-border payments within ASEAN, according to the central bank.
The NBC is also working with other countries in Asia, Africa, Latin America and Europe to increase the scope of secure, low-cost and fast cash payment systems to support and promote tourism, investment and trade and remittances of the Cambodian migrant workers from abroad, NBC’s deputy governor said.
According to NBC’s report, as of 2022, the payment system infrastructure has grown manifold and has contributed remarkably to financial inclusion. The number of transactions using the system increased year on year by 2.7 times to 30.3 million.
The riel has seen a steady increase in demand over the past two decades, with an average annual growth rate of 16.6 percent from approximately 356 billion riels (around $8.4 million in 1998 to 14.1 trillion riels (about $10 billion) in 2022.
As a dollarized country, increasing riel use reflects the confidence of Cambodian people on local currency, she added.
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