National Bank of Cambodia (NBC) governor Chea Serey announced an increase in electronic transactions and payments in Cambodian riel for 2023, noting that they were 44% higher than in 2022.

She shared the figure while presiding over a March 20 event marking the 44th anniversary of the circulation of Cambodian riel, and its journey towards the blockchain-based Bakong interbank payment system, held at the Centre for Banking Studies in Phnom Penh. 

The central bank chief explained that in order to promote the use of the national currency, the NBC has implemented electronic systems which facilitate its use, most notably through the Bakong platform, which means riel transactions are modern, faster and feature reduced fees.

“As a result, the electronic use of riel has increased. In 2023, they jumped by 44 per cent over 2022. The increase in electronic riel transactions was far higher than the increase in those that used USD, which increased just 3.1%,” she noted.

“In addition, the NBC pushed for payment links with neighbouring countries and others in the region, so Cambodian people can use their riel accounts to pay via QR code,” she added.

Serey continued that the digital links means foreign guests are now able to pay for transactions using QR code in Cambodia, with businesses receiving payment in riel. 

At present, the payment systems are linked with Thailand, Vietnam and Laos, as well as several international payment service companies. The NBC has plans to connect to systems in China and India.

She noted that in addition, the NBC has introduced regulations which favour the use of riel, in order to encourage people to take advantage. Charges for transactions in riel are lower than in foreign currencies, while banks and financial institutions are now required to have at least 10 per cent of their total credit in riel.

Recently, the NBC worked with the UN Development Programme (UNDP) in Cambodia to assess how the use of riel could be encouraged for salary payments in the garment, footwear and travel goods industries.

Serey explained that workers earned income in USD, but over 80% of them spent riel in their day-to-day lives and sent riel home to their families. This costs them time and money, due to having to deal with exchange rates.

She said many workers have agreed to receive full or partial wage payments in riel. 

“I encourage more companies to increase the amount of wages they pay in riel. I ask that banks, financial institutions and microfinance institutions receive deposits and provide payment services in riel, through the use of QR code. This will facilitate an increase in its daily use,” she added.

Khoy Rada, an economist for policy and innovation at the UNDP, noted that state institutions predominantly use riel, while the private sector employs foreign currencies, especially USD, which remains in wide circulation. 

He added that a nationwide study of dollarisation in Cambodia by the NBC and the JICA Ogata Research Institute had offered insight into dollarisation in the Kingdom at the levels of families, businesses and financial institutions. 

“In Cambodia, it was noted that when we use foreign currencies for the payment of goods and services, informal exchange rates for the payment are biased towards vendors or suppliers,” he said.

The study showed that workers who are paid in dollars could face losses due to currency mismatches when they pay for goods and services. 

Rada explained that the active participation of the private sector is an important part of strengthening the use of the riel. He also reiterated the advantages of being paid in riel, especially for low-income earners.

To celebrate the 44th anniversary of the first printing of riel banknotes on March 20, 1980, the central bank is collaborating with deposit-taking microfinance institutions and banks on a riel promotion campaign. 

People can bring their old, torn or worn out riel banknotes and exchange them with new ones, at any time from 7:30am to 3pm. The campaign is set to run from March 20-29.