Victor Ugochukwu · Dec 14, 2020 . 5min read
Cambodia launches National Blockchain-based payment system Bakong
Cambodia introduced blockchain-based payments and money transfer service Bakong. It facilitates digital money transactions.
By Komal Joshi · Oct 30, 2020 . 5min read
Cambodia officially introduced a blockchain-based platform for digital money transactions called Bakong. The National Bank of Cambodia’s Bakong blockchain payment system officially advanced into production after an extended pilot period. Bakong is a payment and money transfer service through banks or microfinance institutions.
An essential idea for launching Bakong is financial inclusion. Cambodia has a high rate of smartphone penetration. However, more than 100% of the population has a smartphone, definitely some more than one. Nevertheless, just 22% of people over the age of 15 have a bank account. An account is not needed to use Bakong. Instead, a wallet can be opened by receiving a money transfer or by moving to a payment agent and trading cash for tokenized money.
Bakong first secured association from Cambodian financial giant PRASAC in October 2019. In January 2020, Cambodia’s central bank determined the platform’s launch, unveiling the system as a closed-circuit enterprise. Japanese blockchain firm Soramitsu developed the solution. It is the leading firm behind the Hyperledger Iroha protocol. Every wallet is linked to a financial institution. The central bank regulates the master ledger, and commercial banks have links that have copies of the relevant data. Thus, offering redundancy. To date, there is an inclusion of 18 financial institutions.
How Bakong operates for customers?
To sign up, a user has to give a photo ID. However, one also has to submit a selfie along. Bakong utilizes the OCR to process the ID. Then a comparison between the selfie and ID’s picture takes place. The mobile app is very easy to use, with just four functions. A wallet holder can transfer money to a registered user or scan a QR code to send money to non-users. The user can also represent their individual QR code to receive money.
The users can transfer the balance to a bank account. Those who don’t possess a smartphone can utilize the recipient’s phone number to transfer money. However, if there’s no smartphone, it’s difficult to verify identity. Thus, without smartphones, one can process small value payments. Moreover, for processing payments, the app does not charge fees. The notifications about the transactions occur within 2-3 seconds.
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