Cambodia may not be the first country that comes to mind when discussing fintech leadership. Yet with the introduction of Bakong—a central bank digital currency platform powered by blockchain—it has quietly positioned itself at the forefront of payment innovation in Southeast Asia. As Bakong expands through cross-border QR code integrations, Cambodia’s digital economy is taking on new significance in the region’s financial architecture.
In this article, we explore how Bakong works, its technical foundation, and why it matters—not just for Cambodia, but for ASEAN’s future of interoperable, inclusive, and blockchain-based finance.
What Is Bakong? A Blockchain-Based National Payment System
Launched by the National Bank of Cambodia (NBC) in October 2020, Bakong is not a cryptocurrency, nor a fully decentralized currency like Bitcoin. Instead, it’s a quasi-central bank digital currency (CBDC)—built on a private blockchain and issued and regulated by the central bank.
At its core, Bakong is a real-time payment and settlement system that uses Distributed Ledger Technology (DLT) to record transactions. It provides interoperability across multiple financial institutions, enabling users of various banks and e-wallets to send and receive money seamlessly using mobile apps.
Bakong is built on the Hyperledger Iroha blockchain, a permissioned ledger architecture that allows the NBC to retain control over issuance, validation, and governance while still enjoying the transparency, traceability, and security of DLT.
Key features of Bakong include:
- QR Code Payments: Users can scan a merchant’s QR code for instant settlement.
- Interbank Transfers: Money can be sent between different banks and e-wallets in real-time.
- Currency Support: Supports Cambodian Riel (KHR) and US Dollars (USD).
- Mobile Access: Both banked and unbanked users can access Bakong via smartphone apps.
Also read, NBC and PJA Sign MoU to Enable Cambodia-Japan Cross-Border QR Code Payments
Solving Cambodia’s Financial Fragmentation
Before Bakong, Cambodia’s financial system was fragmented. Mobile wallets operated in silos, banks used proprietary systems, and interoperability was minimal. This created inefficiencies, high transaction costs, and limited financial inclusion.
Bakong addresses these challenges by acting as a unified backbone for digital transactions. It integrates over 60 financial institutions—including commercial banks, microfinance institutions, and payment service providers—into one shared infrastructure.
For users, the benefits are immediate:
- No fees for most peer-to-peer transactions.
- Instant settlements, reducing reliance on cash.
- Greater accessibility for rural users and small businesses.
This makes Bakong a compelling model for countries looking to boost financial inclusion without relying on volatile cryptocurrencies or fully decentralized systems.
Technical Foundations: Hyperledger Iroha and API Integration
Bakong’s strength lies in its technical simplicity and scalability. Unlike public blockchains like Ethereum, it operates on a permissioned blockchain, meaning only authorized participants—such as NBC and licensed financial institutions—can validate transactions.
Why Hyperledger Iroha?
- Lightweight and Modular: Designed for mobile-first platforms.
- Asset and Identity Management: Supports tokenization and user account control.
- Efficient Consensus Algorithm: Uses Yet Another Consensus (YAC), suitable for networks with limited validators.
- Interoperability: Designed for integration with legacy banking systems and other Hyperledger projects.
On the front end, Bakong uses open APIs that allow financial institutions and e-wallets to plug into the system. This API-driven approach is critical for scalability and cross-border compatibility.
Also read, NBC Launches BAKONG Tourists App with VISA to Revolutionize Digital Payments in Cambodia
Going Global: Cross-Border QR Payments with China and Thailand
While Bakong initially focused on domestic interoperability, it has now expanded into cross-border transactions—a major milestone in Cambodia’s fintech journey.
In March 2023, NBC announced the launch of cross-border QR payment functionality with China’s UnionPay system. This allows Cambodian users to scan UnionPay QR codes in China and pay directly from their Bakong-linked accounts—and vice versa.
In 2022, Cambodia and Thailand began piloting cross-border QR code payments between Bakong and PromptPay, Thailand’s national e-payment system. The goal is simple: enable travelers, SMEs, and migrant workers to send or spend money seamlessly across borders using mobile wallets.
By late 2025, NBC aims to expand this functionality to other ASEAN countries, aligning with the ASEAN Payment Connectivity Framework, which promotes interoperable QR codes, faster payments, and digital currency experimentation across the region.
Cambodia’s Strategic Leap in ASEAN Fintech
Bakong’s quiet but steady progress signals something bigger: Cambodia is not just catching up in digital finance—it’s innovating.
Most countries experimenting with CBDCs are still in the pilot stage. Cambodia, however, has a live and functioning digital currency platform, used by tens of thousands daily. According to the NBC, Bakong processed more than 25 million transactions worth over $15 billion in its first three years.
This positions Cambodia as:
- A testbed for blockchain-based public infrastructure
- An ASEAN leader in mobile-first, cashless payments
- A contributor to regional payment standardization
Cambodia’s progress also supports regional goals such as the ASEAN Digital Integration Framework and financial inclusion targets under the Sustainable Development Goals (SDGs).
Also read, National Bank of Cambodia Introduces “Bakong” for Streamlined Tourist Payments
Financial Inclusion and the Unbanked
One of Bakong’s most transformative impacts is its role in bridging the financial gap for Cambodia’s unbanked population, which remains high despite recent improvements.
With only about 50% of Cambodian adults owning bank accounts, Bakong provides a low-cost, low-barrier entry point into the formal financial system.
How?
- No need for a traditional bank account—users can sign up via supported mobile wallets.
- Supports both KHR and USD, allowing users to transact in familiar currencies.
- Works in rural areas with smartphones and limited internet.
This creates a stepping stone for informal workers, small traders, and rural populations to access savings, loans, and digital commerce—fostering financial resilience and digital literacy.
Developer and Startup Opportunities
As Cambodia’s fintech sector matures, startups, developers, and investors have new opportunities to build on top of Bakong’s infrastructure.
Potential areas include:
- Lending platforms using Bakong transaction history for credit scoring.
- E-commerce plugins for QR code payments.
- Blockchain-based remittance services linking diaspora communities.
- RegTech and compliance tools for licensed institutions.
NBC has already introduced a regulatory sandbox and fintech innovation policies to encourage responsible innovation. For developers and regional investors, Cambodia offers a lightly regulated, innovation-friendly environment with growing smartphone penetration and digital adoption.
Privacy, Regulation, and Risks
Despite its promise, Bakong also raises important questions about privacy, surveillance, and cybersecurity.
As a centrally controlled platform, NBC has visibility into transaction flows, raising concerns among privacy advocates. However, the use of a permissioned blockchain offers better control over data protection and compliance.
NBC has also introduced consumer protection regulations, including limits on daily transfers, biometric authentication, and Know Your Customer (KYC) requirements, to ensure safety and trust.
International partners like the IMF have praised Cambodia’s cautious yet forward-thinking approach to digital currency governance—balancing innovation with stability.
Also read, Visa Study Highlights Growing Opportunity for Digital Payments in Cambodia
The Road Ahead: Regional Leadership and Interoperability
Looking forward, Cambodia is expected to push for:
- Expanded cross-border payment corridors, especially with Vietnam, Laos, and Singapore.
- Merchant QR code standardization, aligning with EMVCo and ASEAN norms.
- Increased public-private collaboration on e-commerce, tourism, and digital identity integration.
- Education campaigns to promote adoption among SMEs and rural populations.
NBC has also hinted at exploring retail CBDC enhancements and tokenized assets, suggesting that Bakong could evolve into a broader digital financial ecosystem.
Also read, Cambodia Advances in Digital Taxation and Public Service Payments
Conclusion
In a region dominated by giants like Singapore and Thailand, Cambodia’s Bakong stands out as a pioneering national payments system built on blockchain, mobile technology, and inclusive design.
It’s not perfect. Coverage is still expanding. Awareness is growing. But Cambodia has already done what many developed countries are still piloting—launching a live, functioning, and scalable central bank blockchain platform.
As cross-border integration accelerates and developers build new services on top of Bakong, Cambodia is no longer just following global fintech trends—it’s helping shape them.
For policymakers, investors, and digital finance innovators, Cambodia is one to watch.
