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Nidhi Kolhapur
Nidhi Kolhapur
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Nidhi is a Certified Digital Marketing Executive and Passionate crypto Journalist covering the world of alternative currencies. She shares the latest and trending news on Cryptocurrency and Blockchain.
- Dec 27, 2024 13:30 UTC
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National Bank of Cambodia Allows Stablecoin Services, Tightens Crypto Regulations
Cambodia approves stablecoin services for banks but maintains a strict ban on unbacked cryptocurrencies like Bitcoin.
National Bank of Cambodia enforces new crypto rules, allowing stablecoins while prohibiting unregulated digital assets.
In the latest development, The National Bank of Cambodia has approved compliant stablecoin services but bans unbacked assets like BTC.
Cambodia Approves Stablecoin Services While Upholding Bitcoin Ban
The Central Bank of Cambodia now allows commercial banks and payment institutions to provide services involving Category 1 cryptocurrencies, i.e., backed or stable cryptocurrencies. However, unbacked cryptocurrencies, such as Bitcoin, remain prohibited.
The development was formalized in a prakas issued on December 26 and announced by NBC on December 27 as reported by The Phnom Penh post. The directive aims to regulate operations and businesses involving digital currencies, reflecting the country’s effort to keep pace with global financial innovations.
National Bank of Cambodia Introduces Strict Rules for Crypto Services
Under the new directive from the National Bank of Cambodia (NBC), commercial banks and payment institutions must obtain prior approval to offer crypto-related services. Authorized institutions can engage in activities such as exchanging crypto assets for fiat currencies, transferring crypto between accounts, and providing custody services. However, they are explicitly prohibited from using their customers’ crypto assets for their own purposes.
Historically, Cambodia has banned cryptocurrency transactions and trading due to concerns about high risks, including money laundering, fraud, and illicit activities in the black market.
Economic researcher Hong Vanak of the Royal Academy of Cambodia noted the growing global popularity of cryptocurrencies, which are used not only for payments but also traded like stocks due to their highly volatile prices, particularly unbacked cryptocurrencies.
Vanak argued that cryptocurrencies provide limited benefits to Cambodia’s national economy due to their digital and decentralized nature, which makes regulation, taxation, and ownership tracking challenging. However, he acknowledged that commercial banks and institutions offering crypto asset services could generate revenue through user fees.
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