Cambodia became one of the first countries in the world to launch a Central Bank Digital Currency (CBDC) in October 2020. The digitization of financial services was expected to follow suit.
However, two years after Bakong’s launch, no other ASEAN country has launched a digital fiat currency. As the hype around CBDCs cools down, Southeast Asian nations are less concerned about making the first moves in this nascent space than whether CBDCs offer benefits worth their costs.
Evaluation of Project Bakong in Cambodia
The Cambodian government pushed Project Bakong because it believed a retail CBDC could achieve three main policy goals. US dollars in everyday transactions. We have worked with Japanese blockchain company Soramitsu to make transactions with Bakong easier and faster. With Bakong e-wallet, you can send money and pay with just a phone number or QR code.
Bakong has had modest, if not overwhelming, success. Indeed, according to the National Bank of Cambodia (NBC), by the end of 2021, in a country of 16.7 million people, he will reach 5.9 million, and the total transaction value will reach $ 2 billion, and the number of users is growing rapidly. But when it comes to financial inclusion, this is not yet a game changer. It is reported that among previously unbanked Cambodians, only 200,000 now use Bakong e-wallets.
At the same time, it is unclear whether Bankong will accelerate the country’s de-dollarization, a long-term policy goal for NBC and one of the main reasons it was launched in the first place. For now, Bakong e-wallet can be used for both dollar and reel trading.
Other potential early adopters
Laos is also considering working with Soramtisu on a CBDC, but the project remains at the feasibility study stage. Laotian policymaker believes CBDC could provide better economic data and ultimately facilitate his CBDC-based payments across the border with China, the country’s second trading partner. I think.
It remains to be seen whether the CBDC will protect the kip against excessive RMB inflows. Since the global financial crisis, Asian countries with active trade with China have placed more emphasis on the stability of their currencies in the renminbi.
Myanmar is another Southeast Asian country that could benefit from a CBDC. 70% of her population, or 40 million people, are unbanked. In February, Myanmar’s military government said it intended to issue a CBDC within a year to support domestic payments and stimulate the economy.
However, political unrest in Myanmar has complicated the issuance of CBDCs, with both the ruling military junta and Myanmar defectors vying to issue CBDCs. Myanmar defectors who fled the country after the 2021 coup help the US Federal Reserve plan to use $1 billion in funds frozen by the US to create a digital chat and a new central bank I hope that
“We just need US approval to effectively use the frozen money,” Tin Tung Naing, the planning minister for the National Unity Government in exile, told Bloomberg in September.
He makes unfreezing the funds sound easy, but the politics of the situation are delicate, to say the least.
Elsewhere in Southeast Asia, more countries are capping the CBDC ring, some of which are backed by Soramitsu. The Japanese blockchain firm announced in June that it would launch CBDC feasibility studies in both the Philippines and Vietnam. Neither country particularly needs a retail CBDC, given that their existing digital financial ecosystems are already well developed and promoting financial inclusion.
The same is true for Indonesia, but the focus on wholesale CBDCs restricted to use by banks will help Bank Indonesia avoid using crypto as a payment method and facilitate cross-border payments. may help you to The digital rupiah conceptual design should be deployed by the end of the year.
With more than 80% of its population having a bank account, Thailand is considering issuing a retail CBDC, but understandably has not rushed or made a firm commitment to doing so.
Meanwhile, the regional financial center Singapore has been candid about whether to issue a CBDC. Must issue Singapore dollars.
MAS is experimenting with a wholesale CBDC (Project Ubin), but in a country where 98% of adults have bank accounts and the digital payments infrastructure is comprehensive, a retail digital fiat currency is not essential. Whether Singapore ultimately pursues her CBDC may depend to some extent on international developments, particularly those of its major trading partners.
However, the real question here is whether Southeast Asian countries need CBDCs. Payments are already cheap and ubiquitous, with real-time payments becoming nearly ubiquitous across regions, increasingly cross-border, and stablecoins in the spotlight, will CBDC bring about even greater change? Unlikely. In fact, the only motivation the government would have for his CBDC is similar to China, i.e. better insight and control over how financial institutions and retailers are using digital money. is.