Cambodia is in the launched phase. In October 2020, the National Bank of Cambodia launched a CBDC (referred to as Bakong). After one year, the CBDC amassed 200,000 users and 1.4 million transactions with a total value of around $500 million. By January 2022, it was reported in Nikkei Asia that the CBDC had reached nearly half the population.

CBDC History and Development

The National Bank of Cambodia first launched its CBDC in 2020. National Bank of Cambodia assistant governor and director general Chea Serey has said Bakong is not a CBDC, but rather a payment system. Serey said in an interview that “It is quasi and it's not exactly what a central bank digital currency supposed to be. For instance, it is not a token based, it is account based.” However, CBDCs can come in both token-based and account-based models.

To develop the CBDC, the National Bank of Cambodia worked with the company Soramitsu using the Hyperledger Iroha blockchain framework, according to reporting by the World Economic Forum. Citizens can use the CBDC through a mobile app, but users must also choose a bank within the network to cash-in and out of the system.

In August 2021, the National Bank of Cambodia announced the launch of a “real-time funds transfer service between Malaysia and Cambodia through the [National Bank of Cambodia’s] Bakong e-wallet and Maybank’s MAE app.” In other words, the CBDC could be used for cross-border payments. However, there is a fee for transactions and transfers can only be sent to, not out of, Cambodia.

Human Rights and Civil Liberties Concerns

Cambodia earned a 24 out of 100 in Freedom House’s 2023 Freedom in the World report. This low score is due in part to just how many concerns are present over a wide range of issues. However, the most relevant concerns to the issuance and use of a CBDC are the use of sweeping surveillance and the presence of widespread corruption. Its CBDC could worsen both issues.

“The law gives the government legal authority to monitor all telephone conversations, text messages, email, social media activity, and correspondence between individuals without their consent or a warrant,” according to the U.S. State Department. Worse yet, any opinions expressed over these mediums “that the government deemed to impinge on its definition of national security could result in a maximum 15 years’ imprisonment.” Unfortunately, a CBDC could be used to greatly expand surveillance by putting financial records on government databases by default.

Corruption is widespread in Cambodia and has often been left unaddressed by authorities. For example, the U.S. Department of State stated that “There were reports police, prosecutors, investigating judges, and presiding judges took bribes from owners of both legal and illegal businesses.” The existence of pervasive corruption is a major concern with CBDCs because it calls into question any promises that might be made by the government to limit surveillance, control, or other risks of CBDCs. Furthermore, the existence of corruption calls into question whether CBDC policies might be designed to exert political favoritism through subsidies, price controls, or other targeted restrictions.

For additional information on concerns regarding violations of human rights and civil liberties, see the following reports by Amnesty International, Financial Tyranny Index, Freedom House, Human Rights Watch, Privacy International, and the U.S. Department of State. For additional information on concerns regarding the risks of CBDCs, see the following webpage and report by the Cato Institute: The Risks of CBDCs and Central Bank Digital Currency: Assessing the Risks and Dispelling the Myths.

For additional information regarding metrics, the methodology page explains each of the data points and provides their respective sources.