The CBDC-like bakong provides digital payment services in riel and the U.S. dollar. It has been steadily extending its regional scope.
The bakong, a digital currency operated by the National Bank of Cambodia (NBC), will provide users with access to the Alipay merchant network and enable cross-border transactions on Alipay+ using QR codes under a memorandum of understanding (MoU) signed at the FinTech Expo in Singapore, the local press reported.
The bakong service is operated by the NBC on a blockchain, but it is not a central bank digital currency (CBDC), as the currency is a liability of the commercial banks that use it. The bakong enables both United States dollar and Cambodian riel accounts. The Cambodian economy is heavily dollarized.
The MoU means that Cambodians can use riel from their bakong wallets to shop with 83 million merchants worldwide on the Alipay network. In addition, Chinese tourists who have accounts with China’s massive Alipay electronic payment system will be able to shop in Cambodia using the QR codes of the bakong KHQR system. NBC governor Chea Serey said:
“The simplicity of making payments provides merchants with a revenue boost, helping to stimulate economic activity. I’m confident this collaboration with Alipay+ will be beneficial for all parties.”
There were 35.4 million transactions worth $12 billion using the bakong in the first half of 2023, the Phnom Penh Post reported on Nov. 17.
The bakong service was launched in 2020 and was designed for sending remittances and making purchases. Its mobile app was developed in collaboration with Japan’s Soramitsu blockchain. In August, Soramitsu announced plans to use the bakong to develop a cross-border payment system encompassing India, China and Japan. The bakong is already used in Malaysia, Thailand and Vietnam.
Local vendors can now use the KHQR network of the Bakong system, a part of the National Bank of Cambodia (NBC), to make payments to over 80 million Alipay merchants globally.https://t.co/hLagrXU08X— The Phnom Penh Post (@phnompenhpost) November 17, 2023
In July, the NBC signed a MoU with China’s UnionPay International on the use of QR codes for cross-border payments.
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