Cambodia is launching a blockchain network for the country’s payment system. The new distributed ledger technology network is aimed at boosting the use of the local fiat currency and cutting down the US dollar use. It will facilitate real-time payments, and the country hopes to bring down the cost of payments drastically. The payment system will have several benefits, but the main goal is to reduce the use of US dollar.
“The US dollar accounts for over 90% of the local payments.”
The assistant governor of the National Bank of Cambodia, Serey Chea, said at a recent event that the US dollar accounts for over 90% of the local payments, which makes Cambodia one of the most dollar-dependent economies in the entire world. The DLT payment network is the country’s best chance of cutting down the dollar use, and the central bank intends to exploit it fully. The assistant governor revealed that the regulator intends on launching it this year, “hopefully very soon.”
The new blockchain network will bring together the banks and e-wallets providers, which would allow the users to transact money among themselves.
All the financial services providers in the country will join the network.
Currently, the blockchain network has 12 of the country’s leading banks, but the assistant governor of the national bank expressed confidence that all the financial services providers in the country will join in. The blockchain network will also extend to cross-border funds transfers with neighboring country Malaysia. Currently, over 30,000 Cambodians work in Malaysia, and every month, they send funds back home to their families.
The charges for sending those funds home are excessive and end up taking up to 30% of the funds. The new blockchain system will drastically reduce these charges, enabling the swift movement of funds back to home country Cambodia.