The central bank, which has been building Project Bakong since 2017, views its quasi-digital currency project as a high-tech revamp of the Khmer Riel, Cambodia’s official currency but hardly its de facto cash choice, as locals have favored the U.S. dollar for decades, according to the white paper published Thursday.
The central bank of Cambodia said that Bakong will help challenge the dollar’s reign by inducing the Cambodians to pay via QR codes and a mobile app, with a Hyperledger Iroha blockchain facilitating real-time fund transfers between e-wallets plugged into their bank accounts.
Blockchain in Cambodia will most probably work between Bakong accounts and traditional accounts, record transactions on a distributed ledger, reach consensus via the block voting hash-based “Yet Another Consensus” algorithm, and process transactions in five seconds or less, according to the white paper.
The Central Bank added in the white paper: “Transaction throughput is between 1,000 and 2,000 transactions per second,” depending on tech specs,. “This suggests that there is potential for this project to scale.”
The bank said its system’s peer-to-peer nature removes the inefficiencies of centralized clearinghouse models without costing users anything to transact.
“Since banks and individual users are now brought into one DLT platform both banks and users no longer face interconnectivity and interoperability problems,” the central bank said.
The demographically-young and increasingly tech-savvy population of Cambodia will likely boost Bakong adoption, according to the bank. Cambodians are increasingly porting their financial lives onto their phones: e-wallet accounts in the country climbed 64% in 2019 to a record 5.22 million, according to the paper.
It is still unclear precisely when Project Bakong will fully launch. The white paper said “early 2020,” despite being published midway through the year.