The bakong, a digital currency operated by the National Bank of Cambodia (NBC), will provide users with access to the Alipay merchant network and enable cross-border transactions on Alipay+ using QR codes under a memorandum of understanding (MoU) signed at FinTech. Expo in Singapore, local press reported.
The bakong service operates by NBC on a blockchain, but is not a central bank digital currency (CBDC), as the currency is a liability of the commercial banks that use it. The bakong allows accounts in both US dollars and Cambodian riels. The Cambodian economy is heavily dollarized.
The MoU means Cambodians will be able to use riel from their bakong wallets to shop at 83 million merchants worldwide on the Alipay network. Additionally, Chinese tourists who have accounts on China’s huge Alipay electronic payment system will be able to shop in Cambodia using QR codes from the KHQR bakong system. NBC Governor Chea Serey said:
“The simplicity of making payments provides merchants with increased revenue, which helps stimulate economic activity. “I am confident that this collaboration with Alipay+ will be beneficial for all parties.”
There were 35.4 million transactions worth $12 billion using the bakong in the first half of 2023, the Phnom Penh Post reported on Nov. 17.
Bakong payment was launched in 2020 and was designed for sending remittances and making purchases. Its mobile app was developed in collaboration with Japan’s Soramitsu blockchain. In August, Soramitsu announced plans to use bakong to develop a cross-border payments system spanning India, China and Japan. Bakong is already used in Malaysia, Thailand and Vietnam.
Local vendors can now use the KHQR network of the Bakong system, part of the National Bank of Cambodia (NBC), to make payments to more than 80 million Alipay merchants worldwide. https://t.co/hLagrXU08X
– The Phnom Penh Post (@phnompenhpost) November 17, 2023
In July, NBC signed an MoU with China’s UnionPay International on the use of QR codes for cross-border payments.
