Cambodia’s Bakong DLT payments volumes reach 3x GDP – Ledger Insights – blockchain for enterprise
The National Bank of Cambodia recently published its annual report, disclosing continued growth in the Bakong blockchain-based payment systems. Payment volumes of $104.81 billion during 2024 represent 330% of the country’s gross domestic product (GDP).
While sometimes described as a central bank digital currency (CBDC), because it was set up by the central bank, Bakong is closer to a tokenized deposit initiative. Bakong currency balances are backed by accounts at commercial banks.
A payment provider could have a couple of Bakong-linked bank accounts that support many thousands of wallets. Hence, the number of accounts, 642,500, is far smaller than the number of wallets and has grown more slowly (by 7%).
There are now around 30 million Bakong wallets, a figure that is 1.69 times the population. In terms of acceptance, 4.5 millions merchants can receive payments because there’s a standard QR code method supported for multiple payment types.
Encouraging Riel local currency adoption
Cambodia is a dollarized economy, where roughly 80% of the economy’s transactions are in US dollars versus the local Riel. One of the objectives has been to increase the use of the domestic currency. National Bank of Cambodia Governor Chea Serey, who initiated Bakong before becoming Governor, had a clear target of increasing the Riel’s usage.
It sounds counterintuitive, but one way this was achieved was by interlinking Bakong with domestic payment systems in other Asian countries. Transactions have to be in Riel for most cross border payments. And the transaction costs are likely to be lower using Bakong, encouraging greater Riel usage. Unlike some other emerging market economies, the value of the Riel has been pretty stable for many years.
Regarding international usage, around 9% of the country’s economy is from remittances and just over 9% can be attributed to tourism.
While dollars still dominate the value of Bakong transactions (70%), when it comes to the number of transactions, the Riel makes up 49%, up from 43% in the first half of 2024.
The total value of transactions rose by 95% to US $104.81 billion.
There were 608.32 million Bakong transactions in 2024, of which 299.32 million were in the Riel. For the Riel, that figure is four times higher compared to 2023 (increase of 332%). By contrast, dollar transaction numbers were up 133%.
In related news, as part of its cross border deals for payments and remittances, it recently celebrated the launch of the second phase of its UnionPay International relationship. It already supported inbound payments from China via UnionPay, but now supports outbound payments by Cambodians to China by being able to scan UnionPay and WeChat Pay barcodes from within the Bakong app. Alipay payments were integrated in an earlier deal.
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