PRESS RELEASE
Soramitsu Co., Ltd.
Shibuya-ku, Tokyo, Japan
FOR IMMEDIATE RELEASE
Monday, October 4, 2021

SORAMITSU, JICA, and Bank of the Lao PDR to Inaugurate CBDC Research

— Study will focus on the capacity of central bank digital currencies to contribute to inclusive economic growth in Laos.
Soramitsu Co., Ltd. (CEO: Kazumasa Miyazawa) has been selected by the Japan International Cooperation Agency (chairman: Shinichi Kitaoka) to participate in a study on the possibility of issuing a central bank digital currency in the Lao People's Democratic Republic. The Japan International Cooperation Agency (JICA), which was founded to foster cooperation with low- and middle-income countries, has worked to promote socioeconomic development in Laos for a number of years. Together with the Bank of the Lao PDR (the central bank and monetary authority of Laos), JICA and Soramitsu will explore the potential contribution of CBDC to the inclusive development of the Lao financial system.
Drawing on CBDC experience gained in Cambodia
SORAMITSU was chosen as the private-sector partner and technology provider for this study due to its experience building and operating an innovative digital currency and national payment infrastructure in collaboration with the National Bank of Cambodia. Piloted in 2019 and formally launched in October 2020, the Cambodian Bakong payment infrastructure has processed hundreds of millions USD in transactions without crashes or security incidents. At its core is Hyperledger Iroha, a distributed ledger technology (DLT) developed by SORAMITSU for the open-source Hyperledger Project. Hyperledger Iroha is a highly performant enterprise-grade blockchain which records all transactions in a chronological series of cryptographically-secured records stored in multiple nodes.

Since 2019, Bakong has operated flawlessly, which has contributed to public trust in the National Bank of Cambodia, and allowed the system to quickly grow its partner network to 25 commercial financial institutions, hosting 5.9 million end users -- around a third of the Cambodian population.

Wholesale payments between institutions and retail payments between end users alike are recorded immediately and immutably on Hyperledger Iroha, making Bakong both the first and the most-used digital currency to be brought into operation by a central bank. Bakong has the technical functionality of a hybrid central bank digital currency, though on a regulatory level it can be better classified as an "indirect" or "synthetic" CBDC.

In addition to millions of bank and PSP customers, over 200,000 previously-unbanked or underbanked Cambodians have created Bakong wallets directly through a SORAMITSU-designed end-user app, enabling them to make transfers and payments instantly and for free. This demonstrates the system's contribution to financial inclusion, a longstanding policy goal of the National Bank of Cambodia. Recently, the NBC and SORAMITSU have extended Bakong functionality to Malaysia's Maybank -- a validation of the utility of CBDCs to improve the lives of migrants by streamlining cross-border payments and reducing remittance fees.

In 2020, SORAMITSU was recognised for its work on Bakong with the Central Banking journal's inaugural FinTech & RegTech Global Award for Central Bank Digital Currency Partner. In 2021, SORAMITSU won a Japan Financial Innovation Award and was shortlisted by the Monetary Authority of Singapore as a finalist in its Global CBDC Challenge, while the National Bank of Cambodia's governor Chea Chanto was awarded Central Banker of the Year Asia-Pacific for his efforts promoting innovations like Bakong.
Using blockchain to accelerate inclusive development in the Lao PDR
On the strength of these achievements, SORAMITSU was selected by JICA and the Bank of the Lao PDR to assist in comprehensively studying the technical and socioeconomic dimensions of CBDC in Laos. The study will assess the potential contributions of CBDC to financial inclusion, as well as to the operation of the Lao financial system in general. It will furthermore explore the applicability of cross-border schemes similar to those developed by the NBC and Maybank, as well as ambitious multi-CBDC arrangements involving numerous central banks.

This groundbreaking research will intersect with recent policy developments in the Lao PDR: specifically, the Law on Payment Systems, which lays the groundwork for a more stable, resilient, and efficient financial infrastructure driven by best-in-class technology. JICA and the Bank of the Lao PDR are confident that SORAMITSU's unique competence and experience will expedite the realisation of this vision.

"SORAMITSU are very pleased to start this joint research on CBDC with the Bank of the Lao PRD and the Japan International Cooperation Agency, based in part on our accomplishments in Cambodia. Support from JICA and the Japanese government is invaluable to Southeast Asian economic development, and we look forward to contributing our technology and experience to Japan's efforts. It is SORAMITSU's mission to disseminate performant blockchain technology worldwide, improving financial inclusion for the unbanked and realizing real-time cross-border remittances on a broad scale. Together with public-sector stakeholders such as JICA and the Bank of the Lao PDR, we will explore the potential of blockchain and CBDC to contribute to sustainable development goals in Laos and worldwide." Kazumasa Miyazawa, CEO, SORAMITSU Co., Ltd.
About SORAMITSU
SORAMITSU Co., Ltd. is a Japanese/Swiss technology company with expertise in developing blockchain-based solutions for digital asset and identity management. Our mission is to use blockchain to promote innovation and solve pressing societal challenges.

SORAMITSU is the original developer of the open-source blockchain platform Hyperledger Iroha, which is tailored for enterprise and public-sector use. Part of the Linux Foundation's Hyperledger Project, the Iroha blockchain's flexible permissions system and scalable, performant architecture suit it to digital asset and identity management in high-traffic, multi-stakeholder environments.

Utilizing blockchain, SORAMITSU has developed a digital currency for the National Bank of Cambodia, a securities custody transfer system for the Moscow Stock Exchange Group, a closed-loop payment system for the University of Aizu in Japan, and an identity verification system for Bank Central Asia in Indonesia. We have also conducted proof-of-concept tests for several major Japanese enterprises.

Based on these experiences, SORAMITSU aims to deploy cutting-edge technology on a global level in order to expedite financial inclusion and health, mitigate economic inefficiencies, and contribute to the fulfilment of the Sustainable Development Goals.

Press Enquiries
Press Contact: Kazumasa Miyazawa and Taketoshi Mori
Email: Miyazawa@soramitsu.co.jp and Mori@soramitsu.co.jp


Soramitsu Co., Ltd.
SORAMITSU Co., Ltd.
Jingumae Tower Building 13F
Jingumae 1-5-8, Shibuya-ku
Tokyo, JAPAN 150-0001
TEL: 03-6635-2705