The National Bank of Cambodia (NBC) now allows commercial banks and payment institutions to use certain “Class 1” assets such as stablecoins, especially those backed by large fiat currencies. . However, the country still bans Bitcoin.
This development could help accelerate the growth of the country’s nascent blockchain space, but a real transformation will require more Crypto-friendly policies.
Is Cambodia Stablecoin Friendly?
According to local informationthis new step seems to be a positive signal for stablecoin management in Cambodia, but the state is still clearly skeptical about Cryptocurrencies. Mr. Hong Vanak, an economic researcher at the Royal Academy of Cambodia, highlighted this move.
“Cryptocurrencies do not bring many benefits to the national economy due to their digital and decentralized nature, and even complicate management, tax collection and ownership tracking. [Tuy nhiên]greenlighting Cryptocurrency services can bring in large revenue from user transaction fees for commercial banks and financial institutions,” Vanak asserted.
Cryptocurrency regulations in Cambodia have become stricter throughout 2024. For example, the country blocked 16 major international exchanges earlier this month.
Yet national banks of the past were not always so harsh; they each issued central bank digital currencies (CBDCs) and launched cross-border remittance services. However, growing concerns about money laundering have caused regulators to take a closer look at digital assets. Now, stablecoin adoption is the best news for the Cryptocurrency sector in Cambodia.
Over the past two years, Cryptocurrency adoption has grown in the country. However, much of this involves organized crime, creating a negative mark.
For example, researchers discovered an $11 billion underground transaction that took place through Cambodia earlier this year, even involving the President’s extended family. Tether then froze the majority of these assets.
This underground market has even been linked to money laundered from North Korea’s notorious Lazarus group, deepening the scandal. In recent years, Cambodian regulators have partnered with companies like Binance to develop positive regulation.
While Cambodia’s adoption of stablecoins is good, it may take time to expand this to the broader Cryptocurrency sector.