The Cambodian digital currency, bakong, has entered into a strategic agreement with Alipay at the FinTech Expo in Singapore, according to local report. The National Bank of Cambodia (NBC) operates bakong, providing digital payment services in both riel and the U.S. dollar.
Revolutionizing Cross-Border Transactions
Under the memorandum of understanding (MoU) signed at the Expo, bakong users will gain access to the extensive Alipay merchant network. Moreover, the agreement allows for seamless cross-border transactions on Alipay+ through the use of QR codes.
While the bakong operates on a blockchain, it differs from a central bank digital currency (CBDC). Instead, it functions as a liability of the commercial banks employing its services. With accounts available in both U.S. dollars and Cambodian riel, the bakong caters to the heavily dollarized Cambodian economy.
Global Shopping Access for Cambodians
The MoU brings a game-changing opportunity for Cambodians. It will enable them to use riel from their bakong wallets to shop with 83 million merchants worldwide on the Alipay network. Additionally, Chinese tourists holding accounts with Alipay can utilize the QR codes of the bakong KHQR system for shopping in Cambodia.
NBC governor Chea Serey expressed confidence in the collaboration, stating,
“The simplicity of making payments provides merchants with a revenue boost, helping to stimulate economic activity. I’m confident this collaboration with Alipay+ will be beneficial for all parties.”
Bakong’s Journey and Impressive Growth of Bakong Transactions
The first half of 2023 witnessed an impressive 35.4 million transactions, totaling $12 billion using the bakong. This growth signifies the increasing adoption and trust in the bakong service.
Launched in 2020, the bakong service initially focused on remittances and everyday purchases. Developed in collaboration with Japan’s Soramitsu blockchain, the mobile app has been a key player in the digital currency landscape. Soramitsu’s plans to develop a cross-border payment system encompassing India, China, and Japan further solidify bakong’s position in the international market.
Notably, bakong is already making strides in Malaysia, Thailand, and Vietnam.
Continued International Collaborations
This is not the first international collaboration for the NBC, as in July, a memorandum of understanding was signed with China’s UnionPay International, focusing on the use of QR codes for cross-border payments. These collaborations underline Cambodia’s commitment to being a key player in the global digital payment ecosystem.