Bakong, Cambodia’s digital payment system, was launched by the National Bank of Cambodia in October 2020.
Nearly 270,000 people use its digital wallet, and nearly 6 million people have benefited from connected financial apps.
Bakong shows how the scalability, inclusivity, and cost-effectiveness of systems like this may benefit both financial institutions and end users.
The Bakong system was developed by the National Bank of Cambodia (NBC) and Soramitsu, a Japanese technology company, using the open source Hyperledger Iroha blockchain framework.
The most significant advantages of this system are cost savings and user engagement. Bakong has reduced the expenses and fees connected with interbank transactions to a bare minimum, and end-user transactions are currently free.
For its innovative technology and impact on the country’s economic and social growth, the Cambodian Central Bank’s digital payment system has been selected one of the Nikkei Superior Products and Services Awards for 2021.
According to the National Bank of Cambodia’s (NBC) 2021 annual report, the blockchain-based nationwide payment system handled 5.7 million transactions last year, indicating tremendous advancement in the Kingdom’s financial sector.
4.5 million transactions totaling $1.9 billion were conducted in US dollars, whereas 1.2 million transactions totaling 1.7 trillion riel ($421 million) were made in local currency.
Bakong was officially used by 27 financial institutions as of the end of 2021, with 28 more gaining membership and planning to connect to the infrastructure.
Bakong is crucial for improving cross-institutional operations, promoting economic growth, and allowing Cambodia to connect with regional payment networks to facilitate money transfers and cross-border trade transactions, according to the NBC.