Cambodia is among the first countries to have tested a central bank digital currency (CBDC). The country's central bank started testing the digital currency in July of last year. Now, Chea Serey, the director-general of the National Bank of Cambodia, said that Bakong, as the system is called will be operational within the first quarter of 2020.
Bakong is expected to play a critical role for all players active in the payment industry within Cambodia. The goal is to enhance the user experience and enable instant payments, regardless of the organization, people are a customer of. While it uses blockchain technology, Bakong is not particularly decentralized, the Bank of Cambodia stores the records and the network is operated by the commercial banks.
Every user receives a software wallet which is linked to their bank account to improve interaction with hard currency. The move is a noticeable shift from the government's previous stance on cryptocurrency and blockchain. Strict regulation has been imposed on cryptocurrency businesses, forcing them to obtain a license in order to operate.