National Bank of Cambodia’s Director-General Chea Serey has spoken with US finance news network CNBC about her signature ‘Bakong’ initiative saying how the project is assisting Cambodia’s unbanked and that security concerns remain an important question for Central Bank Digital Currency’s (CBDC).
The mobile application Bakong, launched last year, is Cambodia’s first integrated payment system and was designed to allow customers to perform several functions, such as using an e-wallet and making mobile payments, online transactions, and financial applications.
Serey has emphasized that the interbank blockchain-based or distributed ledger technology payment system, is not a CBDC and is wholly fiat-backed. However, many in the industry believe it has been designed as the platform for a future digital Khmer riel.
Cambodia’s digital retail ecosystem was even ranked first in Asia and second globally in the PricewaterhouseCooper inaugural Central Bank Digital Currency Global Index.
Speaking to CNBC’s Street Signs Asia, Serey said around 30% of Cambodian’s do not have a bank account. Adding, for some opening a bank account remains complicated as there is a lot of requirements as opposed to downloading an app and registering yourself.
By having this digital wallet, a form of universal application that anyone can download and register we can capture a segment of the market who have not been able to access the banking system previously, Serey added.
Serey responded to a question regarding security of data and Know Your Customer (KYC) norms stating blockchain is proving to be one of the most secure methods for financial transactions. Adding in terms of data security even though we as the central bank introduced the system, we don’t do the KYC requirements ourselves.
We delegate that to the commercial banks to complete the registration on our behalf. So, the commercial bank will protect the information, in the same manner, they would someone opening a bank account in a branch, Serey said.
Serey ended the interview by saying however data security and e-KYC is an interesting discussion when talking about Central Bank Digital Currency that will be introduced directly by the central bank. Adding, there are still questions regarding who will do the KYC, who will keep the user data.
Watch the interview here: https://www.cnbc.com/video/2021/08/02/cambodias-shift-to-digital-payments-gathers-pace-amid-covid.html