- CBDC(Central Bank Digital Currency) has started its operations in Cambodia on 28th.
- It was developed jointly by Soramitsu Co Ltd of Japan and the National Bank of Cambodia.
- They have introduced a system called “Bacon”
The app supports retail transactions and interbank payments. They use a permit-type blockchain named “Hyper Leisure Iroha,” which Soramitsu has contributed to the development. The bank started its pilot operation last year in July, in which about 20 financial institutions have participated. The bank is expecting a dozen more financial institutions to join them in the future.
The Motive is to Promote Financial Inclusion
The main motive for establishing “Bacon” is to strengthen Cambodia’s financial inclusion, where access to financial services is limited for the people. In Cambodia, 78% of the people over the age of 15 do not possess a bank account. But the penetration rate of smartphones in Cambodia is 150%. So the bacon payment system will be accessible to such people as it does not require a bank account. Another target of “Bacon” is to improve financial institutions’ efficiency and promote its domestic currency Riel in such an environment where the US dollar has captured the market.
How Bacon Works
In personal transactions, users can access their electronic app, which can be downloaded on any smartphone with Android or iOS. They have to scan the QR code or tap the phone number of the person whom they want to send the payment from their wallet. The wallet supports and handles Riel and the US dollar. Bacon possesses a unique consensus algorithm to verify its transaction across the distributed ledger to eliminate fraud risk, counterparty risk, and double payments.
The wallet is also designed to utilize various financial infrastructures developed by the National Bank of Cambodia in the past. The conventional POS system and the other private payment system has also been strengthened. This is done by replacing the conventional relational database with a strong blockchain distributed ledger. As a result, users will now get a faster payment network with no transmission fees.
The director of Central Bank of the National Bank of Cambodia, Chea Serey, said that the launch of “Bacon” has promoted social welfare and promoted electronic payment without the need for cash transactions. He added that it would also benefit people to save themselves from spreading the infection of coronavirus.
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