Bakong: Bridging Borders, Digital Payments with Alipay Integration

According to the local press, the bakong, a digital currency managed by the National Bank of Cambodia (NBC), will grant users access to the Alipay merchant network and facilitate QR code-based cross-border transactions on Alipay+ following a memorandum of understanding (MoU) signed at the FinTech Expo in Singapore.

Bakong, a blockchain-based service managed by NBC, does not qualify as a central bank digital currency (CBDC) because it is a liability of the commercial institutions that employ it.

The bakong supports both United States dollars and Cambodian riel accounts. The monetary system of Cambodia is highly dollarized.

Cambodians can use riel from their bakong accounts to purchase from 83 million merchants worldwide on the Alipay network, per the MOU.

Furthermore, the bakong KHQR system will enable Chinese travelers with accounts with the massive Alipay electronic payment system in China to utilize QR codes to make purchases in Cambodia. Chea Serey, governor of NBC, stated:

 “The simplicity of making payments provides merchants with a revenue boost, helping to stimulate economic activity. I’m confident this collaboration with Alipay+ will be beneficial for all parties.”

The bakong was utilized in 35.4 million transactions totaling $12 billion during the first half of 2023, according to a November 17 report by the Phnom Penh Post.

Bakong Payment, introduced in 2020, is a medium for remittance transfers and online transactions. Its mobile application was created in conjunction with the Soramitsu blockchain in Japan.

Soramitsu declared its intention in August to utilize the bakong as the foundation for a cross-border payment system that would connect Japan, China, and India. Already in use in Malaysia, Thailand, and Vietnam is the bakong.

The NBC and China’s UnionPay International signed a memorandum of understanding in July regarding using QR codes for international transactions.