Development theory and practice (English)

[1M03] Digital Currency and Development: Exploring the Potential Contribution and Challenges of Central Bank Digital Currency, “Bakong,” for Development in Cambodia

*Hisako KOBAYASHI¹ (1. Oriental Consultants Global Co., Ltd.)

Keywords:Cambodia, Central Bank Digital Currency, Bakong, Development

This research explored the potential contribution of Cambodia’s Central Bank Digital Currency, “Bakong” to development and the challenges in doing so. Cambodia’s Bakong, which is one of the first CBDCs issued in the world, has the potential to significantly improve the efficiency, security, and resilience as well as interoperability of the payment systems. The comprehensive analysis indicated that Bakong has advantages in its features and system design, such as cost, accessibility, interoperability, and security. Therefore, it is expected to contribute to financial inclusion, monetary policy implementation, efficient government transfer, and economic development.
Nevertheless, Bakong’s advantages have not been fully utilized yet. The assessment of the initial adoption status of Bakong identified low visibility and adoption, ambiguous advantages over other digital currencies, and no clear vision and goals for data utilization. The main problem of the low penetration is caused by a lack of clear vision and strategies for the utilization of Bakong itself. In order to fully utilize its potential and advantage, Bakong should be recognized as the main digital payment system in the country and placed in the center of the national policy framework.