Cambodia CBDC Tracker

Cambodia is in the pilot phase, but it walks a fine line. In October 2020, the National Bank of Cambodia launched the Bakong payment system. After one year, the system 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 nearly half the population had used the system. In 2023, the National Bank of Cambodia reported 19.5 million accounts had been opened in total (despite a population of only 16.7 million people).

The official website for Bakong describes it as a “Cambodia’s only all-in-one mobile payment and banking app.” To open an account, you must provide your national ID card, account name, and mobile phone number. According to the available information, Bakong does not resemble a CBDC in the purest sense, it does represent a government attempting to further take over the payments system.

CBDC History and Development

The National Bank of Cambodia first launched the Bakong payment system 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. Explaining the distinction further, Serey said, “It is [a] quasi [CBDC] 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 Bakong payment system, 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 access the system 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 Bakong payment system 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.

In 2022, the National Bank of Cambodia’s annual report noted that the central bank “has been closely monitoring the trends in the Central Bank Digital Currency (CBDC) development, both globally and regionally, so as to examine its potential and risks for the future.” Separately, however, the report also discussed the Bakong app. Despite there only being 16.7 million people in Cambodia, the central bank claimed 17.9 million accounts had been opened. Looking to the future, the central bank wrote that the Bakong system was being expanded to allow users to check their COVID-19 vaccination status and “to facilitate payments for large-scale interbank payments.”

In 2023, the National Bank of Cambodia released an annual report that further discussed the Bakong app, but made no explicit mention of CBDC. First, in February, the central bank made it so individuals that have verified their identity can also check their COVID-19 vaccination status within the Bakong app. Second, the central bank noted that 19.5 million accounts had been opened in total and 200.9 million transactions had been made by the end of the year. Third, the Bakong system was still being expanded to “to facilitate large-scale interbank payments.”

In August 2024, the National Bank of Cambodia launched the “Bankong Tourists” app (available in the Apple and Google stores) to allow tourists to use the Bakong payments system. According to the app page, tourists can register an account with an email address, load money into the app at airports or hotels, and use QR codes to spend money.

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.