Cambodia’s Bakong digital currency system, a component of the National Bank of Cambodia (NBC), has recently signed a memorandum of understanding (MoU) with Chinese payment provider Alipay. This will enable Cambodian vendors utilizing QR codes from the KHQR network of the Bakong system to make payments to over 80 million Alipay merchants globally. At the same time, Chinese visitors to Cambodia who use Alipay can shop in the country by scanning QR codes from the Bakong system at participating merchants.
The MoU was signed at the FinTech Expo in Singapore and is intended to promote efficient and secure cross-border payment transactions via QR codes between the KHQR network and Alipay+. The Bakong system is built on a blockchain and is not a traditional central bank digital currency (CBDC) given that the circulating tokens are a liability of commercial banks and not the central bank.
Chea Serey, governor of the NBC, commented on the significance of the collaboration, especially as Cambodia is becoming increasingly popular among Chinese and international tourists. The partnership facilitates payments in both the local currency, riel (KHR), and the US dollar (USD). Douglas Feagin, senior vice president of Ant Group and head of Alipay+, said the partnership will offer added convenience to tourists, who prefer to ‘pay like a local’, using their familiar payment methods wherever possible. Khim Sambo Rothana, head of public relations and the Corporate Social Responsibility (CSR) department at ABA Bank, welcomed the MoU as a positive step toward promoting the use of the Cambodian fiat currency.
In the first six months of 2023, Bakong recorded over 35.4 million transactions, amounting to more than $12 billion, which constitutes approximately 67% of Cambodia’s gross domestic product (GDP). In addition to Cambodia, Bakong is already in use in Vietnam, Thailand and Malaysia.