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 entered a co-development agreement to study and contribute toward 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 report by prominent Jappublicationcaiton Nikkei confirms that the endeavor is to ultimately offer Cambodian citizens a secure and inexpensive way to transmit money.
The central bank has reportedly chosen the Japanese company after examining multiple options, picking the Iroha platform specifically. Soramitsu’s Iroha, unlike bitcoin, allows permissioned parties to take part in monitoring the blockchain. This enables an Iroha-based payment system to scale transactions around 1000x to that of bitcoin, Soraamitsu claims.
Iroha is also enabled with smart-contracts, which Soramitsu says will help create programmable “smart money” that will enable more efficient and secure payment and settlement systems.
Cambodia does not see a modern financial infrastructure for commercial banking. ATMs, as an example, are not easily accessible. However, a 2016 study showed that 48% percent of Cambodians owned at least one smartphone, a 21% increase from 2015. The rise of connectivity coupled with affordable technology sees the Cambodian central bank looking at low-cost payment infrastructure and seems to have found its core platform using blockchain technology.
“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.
Featured image from Shutterstock.
Last modified: May 21, 2020 9:55 AM UTC