Cambodia’s Central Bank Taps Blockchain for Public Payment System
The National Bank of Cambodia is working toward a blockchain payment system for its citizens in partnership with Japanese industry startup Soramitsu. The startup is notably affiliated with the Linux Foundation’s open-source Hyperledger project.
The Central Bank and Soramitsu have started a joint development agreement to study and contribute to the open source development of Hyperledger Iroha, a blockchain project originally developed by the Japanese company. Iroha creates reusable components in C++, enabling web, mobile developers and programmers to contribute to the Hyperledger project. Iroha was accepted into incubation status by Hyperledger in November last year. The National Bank of Cambodia, the country’s central bank and financial regulator, is notably looking at ‘new payment infrastructures’, according to a press release. A prominent Jappublicationcaiton Nikkei report confirms that the effort is ultimately to offer Cambodian citizens a safe and inexpensive way to transmit money.
According to reports, the Central Bank has chosen the Japanese company after examining multiple options, specifically choosing the Iroha platform. The Iroha of Soramitsu, unlike bitcoin, allows the authorized parties to participate in the monitoring of Blockchain. This allows an Iroha-based payment system to scale transactions around 1000x to that of bitcoin, says Soraamitsu.
Application of Hyperledger Iroha to the Central Bank and Regulatory Uses of Blockchain (PRNewsurktner/Soramitsu Co., Ltd.). Iroha is also enabled with smart contracts, which Soramitsu says will help create “smart money” that will enable more efficient and secure payment and settlement systems.
Cambodia, does not have a modern financial infrastructure for commercial banking. ATMs, for example, are not easily accessible. However, a 2016 study showed that 48% of Cambodians owned at least one smartphone, an increase of 21% from 2015. Increased connectivity along with affordable technology, therefore the Central Bank Cambodian, perceives the low cost payment infrastructure and seems to have found its main and ideal platform using blockchain technology. All this in order to meet the needs of a population of almost 16 million inhabitants, approximate data for the year 2015.
“The application of information technology to finance is at a historical turning point,” stated Kazumasa Miyazawa, operating chief at Soramitsu.
The executive added: “Through our work with the National Bank of Cambodia, we will be able to take the first step toward creating a more efficient payment infrastructure, which we hope to expand globally in the future.”
Cambodia joins a growing list of central banks actively exploring blockchain technology for commercial applications and even probing the possibility of central-bank issued digital currencies underpinned by blockchain technology. The central banks of China, England, Australia, Singapore, Sweden, are some of the notable efforts taking shape around the world.
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