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.