"There are other policies that need to be in place, like having a stable exchange rate and inflation rate, as well as [economic] growth prospects," says Chea Serey, when asked if Bakong will be the determining factor in accomplishing the goal of switching Cambodia's dual-currency economy, although it has done a great job so far in increasing the presence of the riel through digital transactions.
Chea Serey tries to avoid using the word "de-dollarization" due to the financial consequences it could bear toward global investors, but affirms that the long term goal of the project is to exclusively use their local currency, but in the meantime, Bakong seeks to encourage and increase the use of their local currency.
A future milestone for Bakong is the implementation of cross-border transactions. The NBC is making great progress on this by working with the central bank of Thailand and Malaysia's Maybank.
Because many women migrate from Cambodia to Malaysia, Chea Serey mentions that they "need a safe and efficient way to send money to their families." Thanks to the reduction of third parties involved, it would also have the beneficial secondary effect of empowering these women to have financial independence.
CBDCs are being adopted more and more by countries, however, their counterparts such as bitcoin are facing tight regulation due to the volatility of their nature.
Countries around the world are taking strict measures against these technologies, crypto related services within financial institutions and crypto mining are prohibited in China, with the latter having suffered a recent crackdown. Meanwhile the US and Europe are tightening rules aimed at cryptocurrency transfers and enforcing KYC measures.
"Who is going to take responsibility when the price crashes?" wonders Chea Serey when asked about currencies such as bitcoin and their valuations. She concurs that consumer protection and regulations are necessary, especially when investors could stand to lose so much.
This article was originally published by Nikkei Asia here