Cambodia floats blockchain-based payments system

Users of the platform will see transaction time reduced to less than 5 seconds.

The National Bank of Cambodia has plotted the course of its e-payments future with the white paper release of the technical details of its blockchain-based payments system initiative “Project Bakong.”

Using the new platform, transactions can be carried out in a decentralised manner, with end users conducting transactions with other users in the same or with different participating institutions. Transactions can be done not only between Bakong accounts but also using traditional bank accounts.

Also, payment transactions are done in real time with settlement finality, and transaction time is forecasted to drop to less than 5 seconds, the whitepaper revealed.

The platform is expected to promote financial inclusion and cashless transactions in Cambodia, whilst reducing costs and time taken to clear the process between banks.

The Bakong platform will make use of Hyperledger Iroha, a permission-based blockchain network, which will ensure the security and transparency of the payments system, according to the regulator.

“Since Bakong is built on top of the Hyperledger Iroha blockchain it preserves the privacy and finality of transactions,” the whitepaper read. “Transactions are transparent to validating nodes, which are run by the NBC as a central bank and a regulator, without disclosing the identity of parties involved in performing the transaction.”

Transactions are validated using an algorithm that ensures consistency across the distributed ledger, resistance to transaction censorship and cyberattacks, whilst avoiding double-spending and counterparty risk in swapping digital assets, the regulator said. All transactions will be stored in the system.

The platform will preserve the existing payment system features introduced by FAST, such as existing business processes and authentication requirements, amongst others. Existing participants of FAST can join the platform without re-investing in the system.

To ensure a common standard of usage, the platform will also adopt the EMV QR Code Payments, according to the whitepaper.