The world is heading towards digitization more than ever before, and many countries are seeking to integrate blockchain technology in their various sectors, with the banking sector on top of these areas.

a statement The National Bank of Cambodia recently released technical details related to preparing for the creation of a blockchain-based payments system dubbed “Project Bakong.”

The Cambodian Central Bank has been behind the construction and establishment of the “Bakong Project” since 2017.

The Bakong project is based on the creation of a quasi-digital currency based on the Cambodian riyal, the official currency in Cambodia but for decades locals have favored the US dollar in their various transactions.

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Cambodia’s central bank told through the Bakong Project White Paper that the project will help challenge the rule and control of the dollar by urging Cambodians to pay via QR codes and a mobile app, while using a blockchain that allows and facilitates real-time transfer of funds between electronic wallets connected to their bank accounts. .

According to the white paper, the blockchain will work between Bakong and traditional accounts, record transactions, reach consensus via a hash-based algorithm, and process transactions in five seconds or less.

The central bank said in the published white paper:

Transaction throughput ranges between 1000 and 2000 transactions per second, depending on the technical specifications.

This indicates that there is potential to expand this project.

The Cambodian Central Bank said the peer-to-peer nature of the system removes the shortcomings of central clearinghouse models without costing users anything for a transaction.

The central bank added in its statement:

As banks and individual users are now combined into a single DLT platform, banks and users no longer face interconnection and interoperability issues.

quasi-digital currency:

Cambodian officials were hesitant to name the fiat-backed project as a central bank digital currency (CBDC) in the past, and instead called it a blockchain payments system.

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Users must upload the Cambodian Riel to their Bakong account before they can transact with others.

According to the Central Bank of Cambodia, the new project will contribute to enhancing financial inclusion, improving inefficient payment systems and even reducing poverty by opening access to all.

The largest segment of the Cambodian population is likely to foster a reliance on modern technologies, as Cambodians increasingly move their financial lives to their phones, as e-wallet accounts in the country rose by 64% in 2019 and their usage reached a record high of 5.22 million according to to source.

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The mass adoption of the central bank could give a greater degree of control over Cambodia’s monetary policy by breaking the dollar’s decade-long domestic grip.

Cambodian central bank officials are already moving to oust the US dollar. Last month, the central bank announced plans to phase out US dollar notes and work to end them by the end of August.

It is still not clear exactly when the Bakong project will be fully launched, according to the white paper it will be launched at the beginning of 2020, but the white paper itself was published only recently, i.e. in the middle of 2020.

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