By permitting commercial banks and financial institutions to offer cryptocurrency services, the National Bank of Cambodia (NBC) has made a revolutionary step. The fact that these services are limited to stablecoins or cryptocurrencies backed by secure assets, however, is a major step in the integration of digital assets into the country’s financial system.
Pay attention to security and stability.
The NBC wants to guarantee the stability and security of cryptocurrency operations within Cambodia’s financial system under the new framework. The NBC still forbids unbacked cryptocurrencies like Bitcoin, citing their volatility and related hazards, but permits regulated digital asset services.
Tight Guidelines to Promote Financial Stability
Any financial institution providing services related to cryptocurrencies must first have express clearance, according to the NBC’s standards. Among the authorised services are:
- converting fiat money to cryptocurrency and vice versa.
- enabling the transfer of cryptocurrencies across accounts.
- supplying digital asset custody and storage.
Institutions are not allowed to use their clients’ bitcoin holdings for their operational needs in order to safeguard users and maintain a clear asset separation.
Crackdown on Crypto Exchanges Without Regulation
Cambodia has stepped up its crackdown on unlicensed bitcoin exchanges in tandem with its regulatory improvements. Recently, 16 significant platforms—including well-known brands like Binance, Coinbase, and OKX—were blacklisted by regulators.
This program aims to eradicate high-risk practices that are frequently connected to unregulated transactions, like fraud and money laundering. Furthermore, 102 websites associated with online gambling were targeted by the Telecommunication Regulator of Cambodia (TRC).
Enforcement measures are made more difficult by the fact that mobile applications for these platforms are still available.
Growing Crypto Market in Cambodia Despite Strict Regulations
According to Chainalysis, despite strict laws, Cambodia leads the world in the amount of cryptocurrency used by retail users per capita. This paradox shows that, in spite of state prohibitions, there is a thriving public interest in digital currencies.
A safer and more compliant environment for transactions is provided by the introduction of regulated banks and payment institutions into the cryptocurrency industry. This might preserve financial stability while opening the door for a greater uptake of digital currency.
By taking a cautious strategy that strikes a balance between innovation and security, the National Bank of Cambodia has established itself as a major player in the global cryptocurrency market.
