Cambodia is accelerating its digital development, enhancing its economy and digital currency. Digital development provides numerous benefits to the business sector. More importantly, the Ministry of Post and Telecommunications (MPTC) is at the forefront of digital development. Why do Cambodia and cryptocurrency matter?

Cryptocurrency refers to the use of digital currencies along with online processes and links to blockchain technology for trading and exchange in the market. In addition, Statista explained that online trading platforms, cryptocurrency exchanges, and neobanks provide either B2C services exclusively or a mix of B2B and B2C services. Robinhood, Binance, and Coinbase are major players in this sector.

According to Statista, it has predicted that Cambodia will generate $7.9 million in revenue by 2024. It expected this revenue to grow annually at -4.82 percent (CAGR 2024-2025), culminating in a projected total of $7.5 million by 2025. Therefore, Cambodia is increasingly adopting cryptocurrencies for financial inclusion and cross-border remittances.

Today, digital currencies, bank systems, and QR-code payments are highly popular in Cambodia, with various sectors and individuals experiencing the benefits of these quick and fast payment methods. According to Nikkei Asia, reported and highlighted by NBC, 10 million wallets have been opened in the central bank with the Bakong digital currency payment system, through which there were 200 million transactions in 2023, up from 40 million.

Cambodia has enhanced and promoted digital development in light of the 2022-2035 digital government policy. This development also benefits the digital economy and digital currency transition. The National Bank of Cambodia's Bakong system collaborates with SORAMITSU Co., Ltd., a Japanese startup company.

In November 2022, MPTC announced that it had drafted a comprehensive law on cybersecurity. The Ministry is reviewing and revising the “Draft Law” on Cybersecurity to ensure it aligns with Cambodia's needs. The aim is to solve and prevent cyber-attacks in Cambodia.

The Ministry of Interior also plays a crucial role in defending against scams and cyberattacks. In 2022, the Ministry of Interior (MOI) collaborated with Binance to sign a Memorandum of Understanding (MoU) with the Securities and Exchange Regulator of Cambodia (SERC). This agreement stated that the crypto exchange would assist Cambodia in drafting laws to regulate the use of digital currency. Shortly after that, another agreement was signed with one of Cambodia's largest conglomerates, the Royal Group.

However, Cambodia faces the challenges of managing and combating the flow of currency transactions through online or digital systems. Given Cambodia's limited cybersecurity, there is room for improvement in tackling fake accounts or transactions. Phnom Penh Post reported in November 2022, “We have drafted a comprehensive law on cybersecurity, but we need more input and comments from the private sector and other public institutions,” Liv Sophanarith said.

Not only Cambodia but also other countries around the world face scams, cybercrime, and hackers. To protect cybersecurity and fight these problems, the government, MPTC, and MOI are putting in a great effort to establish a robust national cybersecurity infrastructure and recruit some specialists to monitor cyberattacks, according to the Phnom Penh Post.  

According to a report released in January 2024 by the U.N. Office of Drugs and Crime, cryptocurrency, casinos, and junkets have become essential components of East and Southeast Asia's underground banking and money laundering networks, supporting transnational organized crime in the area. The criminal groups in Cambodia are using cryptocurrencies to facilitate payments on the dark web and launder the proceeds of illegal operations such as fraud and online gambling.

Notably, the Telecommunication Regulator of Cambodia (TRC), under the management of MPTC, put to block the different URLs, cyber threats, and online gambling. As Nikkie Asia reported on 3rd December, 16 cryptocurrency exchange websites, including Binance and Coinbase, are available. However, their apps need to be improved, underscoring the nation's difficulties in controlling the illicit but rapidly expanding cryptocurrency industry. TRC also identified Binance, a significant player in the cryptocurrency market with a two-year-old collaboration with the Cambodian government, among the alphabet soup of gambling domains like “KHWIN” and “FAFA.”

Fintech News Singapore highlighted that Cambodia continues to take a cautious approach to cryptocurrencies. Under its Fintech Regulatory Sandbox program, only two organizations are permitted to function.