National Bank of Cambodia Opens Doors to Stablecoins

Cambodia Approves Regulated Crypto Assets for Banking Operations

For the first time, the National Bank of Cambodia (NBC) has allowed banks and payment companies to work with certain types of cryptocurrencies. These are stablecoins, a type of digital currency tied to real-world money like the US dollar, which makes them less volatile. However, unregulated cryptocurrencies like Bitcoin are still banned.

This decision, announced on December 27, follows the release of an official directive by NBC. It’s a significant move for Cambodia, signaling an effort to adapt to global digital finance trends while maintaining tight control over potential risks.

What Are Cryptocurrencies, and Why Do They Matter?

Cryptocurrencies are digital money powered by blockchain technology, meaning they aren’t controlled by any government or central bank. People worldwide use them to trade, pay for services, and invest. While this technology has gained massive attention, it also comes with challenges like fraud and illegal transactions.

In Cambodia, cryptocurrencies have been largely banned until now. The government was worried about scams, money laundering, and other risks. But this new directive opens the door for banks and financial institutions to offer limited crypto-related services like:

• Exchanging stablecoins for traditional money (and vice versa).
• Transferring cryptocurrencies between accounts.
• Safeguarding customers’ digital assets.
• Banks must get approval from NBC to provide these services and are prohibited from using their clients’ crypto for their own purposes.

Why Is Cambodia Taking This Step Now?

Cambodia is slowly warming up to the idea of digital assets as a way to keep up with the global trend in financial technology. Countries like Hong Kong, the U.S., and the UAE have already embraced cryptocurrencies to varying degrees, but Cambodia is just getting started.

Still, challenges remain. Earlier this year, Cambodia banned 16 major crypto exchanges, including Binance and Coinbase, because they didn’t have the proper licenses. The government even blocked access to these platforms on over 100 websites to crack down on illegal activities, though mobile apps for these services remain active.

A Long Road Ahead

Experts believe Cambodia’s cautious approach to cryptocurrency stems from its concerns about regulation and transparency. Critics argue that cryptocurrencies don’t directly benefit Cambodia’s economy because they’re decentralized and hard to monitor. However, allowing financial institutions to handle stablecoins could bring some advantages, like fees from users.

On the flip side, Cambodia’s digital economy is growing. By 2024, the country’s crypto market is expected to generate around $8 million in revenue. To support this growth, the government has rolled out a Financial Technology Development Policy (2023–2028), focusing on innovation and regulation in the fintech space.

What Does the Future Look Like?

While Cambodia remains skeptical of traditional cryptocurrencies, stablecoins may offer a safer path forward. They could help reduce the country’s reliance on the U.S. dollar and strengthen the Cambodian riel, its national currency.

Cambodia’s central bank and other regulators are taking baby steps toward a more digital financial future. The challenge now is to find the right balance between encouraging innovation and preventing crime.

By allowing stablecoins, Cambodia is sending a clear message: it’s ready to explore the potential of digital currencies—but on its own terms.