Recently, the National Bank of Cambodia published a blockchain-based white paper, which is a payment system called "Project Bakong". Some voices said that if the system is used on a large scale, it may break the long-term dominance of the U.S. dollar in Cambodia.
Cambodia CBDC is coming soon
Although it was postponed by a quarter, the "Project Bakong" (Bakong project) has been late in recent days.
The white paper introduces that the permission chain will connect Bakong accounts and traditional accounts, record transactions on a distributed ledger, reach a consensus through the "Yet Another Consensus" algorithm based on block voting hashes, and process transactions in 5 seconds or less. In addition, the transaction throughput (TPS) of the system is about 1,000 to 2,000 transactions per second. The point-to-point nature of the system eliminates the inefficiency of the centralized clearing house model and does not make users pay any transaction costs.
The white paper also stated that Bakong’s positioning is different from those of CBDC projects that are emerging in developed countries. Developed countries want to solve the problem of lower cash utilization rate through CBDC, but Cambodia promotes CBDC to promote financial inclusion, improve the inefficient payment system, and even improve social poverty by opening up barriers to entry.
It is reported that Cambodian officials have been reluctant to call this project supported by fiat riel a CBDC, and call it a blockchain payment system, because users must first load riel into their Bakong account before they can communicate with others. Trading.
Incorporate blockchain into future currency plans
Since 2017, the National Bank of Cambodia has been developing this blockchain-based payment system "Project Bakong", which aims to maintain centralized control of the proposed CBDC and establish a closed system that includes banks and other countries in the country. Participants such as financial institutions.
It is understood that the project was developed by the National Bank of Cambodia in cooperation with the Japanese blockchain startup Soramitsu.
In July 2019, the project entered the test phase.
In late January this year, the Cambodia Daily reported that the National Bank of Cambodia will launch "Project Bakong" at the end of the first quarter, a blockchain-based remittance platform with CBDC features.
At that time, Chea Serey, President of the National Bank of Cambodia, said: “Project Bakong will play a central role in the country’s payment sector, enabling all participants to be placed on the same platform and users can easily transfer money across banks.” He also said, Among the 43 banks in Cambodia, 11 banks already support the project. Once the project is launched, more financial institutions will join.
Hin Chang Moo, President of PPCBank, said: “We are in the final stage of deployment. It took longer than expected because we ensured that the system is as useful and convenient as possible for users. One of the participants in the project, we The service will be provided immediately after the service is launched." He revealed that digital currency will not pose a threat to traditional banking. In addition, highly centralized currencies will also eliminate the possibility of speculation, which is very common in digital currencies.
It is understood that Project Bakong will also support cross-border payments in the future.
Will the dollar's "hegemony" break?
Over the past few decades, the Cambodian people seem to prefer to use the US dollar as the main currency in circulation, which has also caused the national legal tender issued by the Cambodian government, the riel, to have been "out of favor".
On May 28 this year, Chea Serey, President of the National Bank of Cambodia, stated in the Khmer Times that blockchain will reduce the local economy’s dependence on the US dollar.
This caused a series of controversies at the time, and rumors spread that Cambodia would ban the US dollar.
A few days later, Cambodian Prime Minister Hun Sen clarified in the newspaper that the U.S. dollar is not banned and is still widely used, and added a warning: “If the issuance of the aforementioned US banknotes ceases, the National Bank will issue an official announcement. Cambodia will be Release to the public." He added, "Please continue to consume the above banknotes freely in the Kingdom of Saudi Arabia, without losing any exchange rate or additional fees."
But in fact, the Bank of Cambodia is phasing out Fed banknotes of US$1, US$2 and US$5. From June 1st to August 31st for a three-month period, banks and microfinance institutions will gradually collect US$1, US$2 and US$5 banknotes to send them abroad without any service fees. However, after August 31, banknotes with a denomination of less than $10 will cease to be accepted.
According to the white paper, Cambodia has a high proportion of young people and a high degree of understanding of technology. More and more people are beginning to use mobile phones to handle personal finances. Statistics show that in 2016, 48% of people in Cambodia own at least one smartphone, an increase of 21% over 2015; in 2019, the number of e-wallet accounts in Cambodia increased by 64% to a record 5.22 million.
The increase in communication level and the popularization of technology, it is obvious that this will promote the use and popularization of Bakong more quickly.
Many people believe that as one of the most reliant economies on the U.S. dollar, the launch of the Cambodian blockchain payment platform may break the previous pattern and gradually take back control of the legal currency.
However, the specific launch date of the system has not yet been announced. Recently, the National Bank of Cambodia published a blockchain-based white paper, which is a payment system called "Project Bakong". Some voices said that if the system is used on a large scale, it may break the long-term dominance of the U.S. dollar in Cambodia.
Cambodia CBDC is coming soon
Although it was postponed by a quarter, the "Project Bakong" (Bakong project) has been late in recent days.
The white paper introduces that the permission chain will connect Bakong accounts and traditional accounts, record transactions on a distributed ledger, reach a consensus through the "Yet Another Consensus" algorithm based on block voting hashes, and process transactions in 5 seconds or less. In addition, the transaction throughput (TPS) of the system is about 1,000 to 2,000 transactions per second. The point-to-point nature of the system eliminates the inefficiency of the centralized clearing house model and does not make users pay any transaction costs.
The white paper also stated that Bakong’s positioning is different from those of CBDC projects that are emerging in developed countries. Developed countries want to solve the problem of lower cash utilization rate through CBDC, but Cambodia promotes CBDC to promote financial inclusion, improve the inefficient payment system, and even improve social poverty by opening up barriers to entry.
It is reported that Cambodian officials have been reluctant to call this project supported by fiat riel a CBDC, and call it a blockchain payment system, because users must first load riel into their Bakong account before they can communicate with others. Trading.
Incorporate blockchain into future currency plans
Since 2017, the National Bank of Cambodia has been developing this blockchain-based payment system "Project Bakong", which aims to maintain centralized control of the proposed CBDC and establish a closed system that includes banks and other countries in the country. Participants such as financial institutions.
It is understood that the project was developed by the National Bank of Cambodia in cooperation with the Japanese blockchain startup Soramitsu.
In July 2019, the project entered the test phase.
In late January this year, the Cambodia Daily reported that the National Bank of Cambodia will launch "Project Bakong" at the end of the first quarter, a blockchain-based remittance platform with CBDC features.
At that time, Chea Serey, President of the National Bank of Cambodia, said: “Project Bakong will play a central role in the country’s payment sector, enabling all participants to be placed on the same platform and users can easily transfer money across banks.” He also said, Among the 43 banks in Cambodia, 11 banks already support the project. Once the project is launched, more financial institutions will join.
Hin Chang Moo, President of PPCBank, said: “We are in the final stage of deployment. It took longer than expected because we ensured that the system is as useful and convenient as possible for users. One of the participants in the project, we The service will be provided immediately after the service is launched." He revealed that digital currency will not pose a threat to traditional banking. In addition, highly centralized currencies will also eliminate the possibility of speculation, which is very common in digital currencies.
It is understood that Project Bakong will also support cross-border payments in the future.
Will the dollar's "hegemony" break?
Over the past few decades, the Cambodian people seem to prefer to use the US dollar as the main currency in circulation, which has also caused the national legal tender issued by the Cambodian government, the riel, to have been "out of favor".
On May 28 this year, Chea Serey, President of the National Bank of Cambodia, stated in the Khmer Times that blockchain will reduce the local economy’s dependence on the US dollar.
This caused a series of controversies at the time, and rumors spread that Cambodia would ban the US dollar.
A few days later, Cambodian Prime Minister Hun Sen clarified in the newspaper that the U.S. dollar is not banned and is still widely used, and added a warning: “If the issuance of the aforementioned US banknotes ceases, the National Bank will issue an official announcement. Cambodia will be Release to the public." He added, "Please continue to consume the above banknotes freely in the Kingdom of Saudi Arabia, without losing any exchange rate or additional fees."
But in fact, the Bank of Cambodia is phasing out Fed banknotes of US$1, US$2 and US$5. From June 1st to August 31st for a three-month period, banks and microfinance institutions will gradually collect US$1, US$2 and US$5 banknotes to send them abroad without any service fees. However, after August 31, banknotes with a denomination of less than $10 will cease to be accepted.
According to the white paper, Cambodia has a high proportion of young people and a high degree of understanding of technology. More and more people are beginning to use mobile phones to handle personal finances. Statistics show that in 2016, 48% of people in Cambodia own at least one smartphone, an increase of 21% over 2015; in 2019, the number of e-wallet accounts in Cambodia increased by 64% to a record 5.22 million.
The increase in communication level and the popularization of technology, it is obvious that this will promote the use and popularization of Bakong more quickly.
Many people believe that as one of the most reliant economies on the U.S. dollar, the launch of the Cambodian blockchain payment platform may break the previous pattern and gradually take back control of the legal currency.
However, the specific launch date of the system has not yet been announced.
Source: Firebird Finance