Technology

Bakong: Cambodia launches blockchain-based central bank digital currency

Different financial institutions in Cambodia have adopted Bakong, including TrueMoney Cambodia. Image credit: Bakong
Different financial institutions in Cambodia have adopted Bakong, including TrueMoney Cambodia. Image credit: Bakong

Bakong, the blockchain-based central bank digital currency system jointly developed by the National Bank of Cambodia and Japanese blockchain company Soramitsu Co., Ltd., was officially launched on Oct. 28.

After starting its pilot operation throughout Cambodia from July 2019 and winning the Central Bank Award, Bakong is now the core system for retail payments and interbank payments in Cambodia. It uses digitized Cambodian riel or US dollars to enable immediate and final transactions. Eighteen financial institutions in Cambodia have already adopted Bakong as of Q3 2020.

Bakong smartphone app

For the Cambodian people, Bakong is a digital currency that does not require remittance fees and allows them to pay faster and more securely. For the Cambodian government, it is a bold challenge and a confident first step to the new world of a fully digital economy.

“We aim to improve financial inclusion, efficiency and security, as well as promote the use of local currencies. Bakong is Cambodia. It plays a central role in placing all players who use their payments under the same platform, making it easier for users to cross the boundaries between banks and pay each other,” said Chea Serey, Assistant Governor and Director General of Central Banking of the National Bank of Cambodia, in a press statement.

Bakong is named after the Bakong Temple in Angkor built by King Indravarman I. It is a state temple of the ancient Khmer Empire dedicated to the Hindu God Shiva.

With the simple and elegant smartphone app, anyone with a phone number in Cambodia will have a digital riel or US dollar wallet. The app is available for download on the App Store and Google Play.

As Cambodia’s only all-in-one mobile payment and banking app, it redefines mobile payment and banking by combining e-wallets, mobile payments, online banking, and financial applications within one easy-to-use interface for any preferred bank account.

Soramitsu and blockchain

Soramitsu is a Japanese technology company that delivers blockchain-based solutions for enterprises, universities, and governments.

Soramitsu’s distributed ledger technology Core Solution is based on Hyperledger Iroha, a fast and effective permissioned blockchain and distributed ledger. Iroha can handle millions of account holders making tens of millions of transactions every day, as fast or faster than any modern bank transfer. Iroha’s crash-fault tolerant consensus protocol keeps information about every account and transaction securely and reliably. There are different possible configurations of the system with respect to the number of nodes and location of the payment gateways.

“We have been enthusiastically building solutions with the National Bank of Cambodia for over three years and are now preparing the technology to expand into other countries and new markets. It is a great honor for our technology to be recognized and awarded for the Central Bank’s contribution to the commercialization of digital currencies,” said Soramitsu Co-Founder and CEO Makoto Takemiya in a press statement.