Southeast Asian nation, Cambodia is launching a blockchain payments system to enhance the use of the country’s fiat currency. The new blockchain network is set to improve the use of the country’s local fiat currency, scaling down the use of the United States dollar.
Moreover, the new blockchain payments system will enable real-time payments, and scaling down the nation’s cost of payment massively. Nevertheless, the new payments network will have several benefits, but bringing down the over-reliance in the U.S dollar is the key objective.
90% of local payments in Cambodia are in USD
According to the assistant governor of Cambodia’s central bank, Serey Chea during a recent event, the United States dollar accounts for more than 90 percent of local payments. In addition, he claims that the huge reliance on the dollar makes Cambodia one of the most dollar-dependent economies on the planet.
Nevertheless, the new blockchain payments system is Cambodia’s biggest chance of reducing the over-reliance on the dollar, which the central bank intends to use fully. Additionally, the assisted governor noted that the central bank intends to launch the DLT network later in the year, “hopefully very soon.”
The new blockchain-based payments network aims to bring together banks, digital wallet platforms, facilitating transactions between users and their preferred platforms, and among themselves.
All financial institutions to join the blockchain payments system
At the moment, the payments system has 12 of Cambodia’s top financial institutions. However, the assistant governor expressed a lot of confidence in all financial service providers joining the new blockchain payments system.
Moving forward, the blockchain system will also expand to foreign soils, with money transfer services expanding to the neighbouring country of Malaysia. More than 300,000 Cambodia citizens work in Malaysia, and they transfer funds to their home country every month. Transferring the funds is very expensive, and the blockchain payments system is expected to bring this cost down massively.
