Instant digital payments are becoming a global norm. What does this mean for emerging economies? How can central banks harness the benefits of digital payment systems, while circumnavigating monopolies and mitigating risks?
These are the questions that drove the National Bank of Cambodia (NBC) to begin research into central bank digital currencies (CBDCs). In 2016, NBC founded a working group to delve into the CBDC concept. One year later, NBC selected Hyperledger Iroha, designed by SORAMITSU, as an ideal platform upon which to build an inclusive national payment system. SORAMITSU began work with NBC in 2018, and a pilot national payment system, called Bakong, was soft-launched in 2019. In October 2020, Bakong was formally launched as the backbone of the Cambodian payment infrastructure. As of January 2021, over 50,000 users based at 20 financial institutions have used Bakong to transact over USD $20mm.
In the short time since its introduction, Bakong has excelled on both technical and socioeconomic levels. After a systematic assessment of competing systems, the Central Banking journal decided to honour SORAMITSU with its inaugural FinTech & RegTech Global Award for Central Bank Digital Currency Partner. For SORAMITSU, this is a milestone on the path toward our goal of iteratively improving financial systems worldwide.
Next Steps
Since Bakong’s 2019 soft launch, its network of partners and users has steadily grown. The National Bank of Cambodia has taken a prudent approach to promotion, allowing SORAMITSU to iteratively improve the system in response to real market conditions that cannot be simulated in a sandbox environment. Early input from a range of stakeholders ensured the system’s relevance, and ongoing consultation during its growth phase will prove crucial to its future-orientation.
“Bakong will eventually create financially inclusive ecosystems that all the stakeholders in the industry can benefit from.” Shin Chang Moo, President, PPCBank
For SORAMITSU, Bakong is an important milestone on the path toward our end goal of improving the efficiency, security, and accessibility of financial systems worldwide. SORAMITSU believes that well-designed distributed ledgers can hasten progress toward this goal––and by doing so, increase human flourishing. Bakong’s official launch and our recognition by Central Banking journal substantiate this belief.
“We are elated to receive this recognition, especially as Bakong is a system that will make a positive impact on the daily lives of all Cambodians. Decentralized technology will revolutionize the global banking industry and SORAMITSU is committed to leading that progress with projects like Bakong.” Makoto Takemiya, CEO, Soramitsu Holdings AG
