Cambodia’s central bank and UnionPay International launch cross-border QR code payment

The National Bank of Cambodia (NBC) and UnionPay launched cross-border QR code payments between the NBC’s Bakong and UnionPay’s global payments platform. UnionPay cardholders will be able to use their UnionPay-enabled wallets to scan Bakong KHQR codes to complete payment transactions at merchants in Cambodia, and by early 2024, Cambodian residents will be able to use their Bakong wallet to make payments at UnionPay QR code accepting merchants in China and globally. [Read more at the NBC]

Bakong’s adoption rate surges as Cambodia strikes more partnership deals

The NBC Bakong online banking and mobile payments app has seen its adoption levels surpass 10 million accounts (about 60% of Cambodia’s population. Bakong allows Cambodians to transfer and receive digital funds using their smartphones without traditional bank accounts. The NBC has also established cross-border payment connectivity with China (see above), Thailand, Laos, and Vietnam, and signed MOUs with the Central Bank of Solomon Islands, the Reserve Bank of Fiji, and the National Bank of Rwanda, to expand the reach of Bakong to these countries. Plus, the NBC has signed a memorandum of cooperation with the Japanese government, to facilitate QR code-based payments between Cambodia and Japan. [Read more at Coingeek]

Some put the central bank digital currency (CBDC) label on Bakong, but the Governor herself has adamantly denied this:

Although the system is built on DLT, it is not a central bank digital currency (CBDC) that some may be quick to assume. Instead, the platform augments the existing Fast and Secure Transfer (FAST), real-time retail payment system and Cambodian Shared Switch (CSS) that facilitate mainly interbank transactions among commercial banks and MFIs.

However, the firm that supplied the underlying technology, Soramitsu, has insisted that Bakong is a CBDC, but I have yet to see a detailed description of the technical architecture that can back that claim up. Also, I haven’t been able to access the NBC financial statements that could confirm or deny the contention. (Here’s a link to the latest annual report, but it’s all in Khmer and not Google Translate friendly because it’s too big (111 MB) and not machine readable.) If it is indeed a CBDC, we should expect to see a line item for it on the liability side of the central bank’s balance sheet.

FYI here are some of my upcoming speaking engagements:

– Digital Euro Conference 2024 (Frankfurt on February 29)[Register here]

*For those interested in intra-day updates, check out my searchable Diigo Fintech developments database, which is also a good place to go to query for past developments: https://www.diigo.com/user/kiffmeister/ART.

Kiffmeister’s central bank digital currency monthly monitor

Just a reminder that I produce a monthly digest of central bank digital currency (CBDC) developments exclusively for the official sector. So (only) if you work at a central bank, ministry of finance or international financial institution (e.g., the BIS, IMF, OECD, World Bank) and who would like to receive it by email on the first business day of every month, please DM me on LinkedIn or email me at chronicles@kiffmeister.com

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