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.