Cambodia allows financial institutions to provide crypto-related services. However, unpegged cryptocurrencies such as Bitcoin remain prohibited.
Cambodia "gives the green light" to crypto, but still bans Bitcoin
For the first time, the National Bank of Cambodia (NBC) has allowed commercial banks and payment institutions to provide services related to Category 1 crypto assets, including pegged or stablecoin cryptocurrencies. This regulation was officially formalized through a Prakas issued on December 26 and published by the NBC on December 27.
However, unpegged cryptocurrencies such as Bitcoin remain completely prohibited.
This directive aims to manage activities and businesses related to digital currencies, reflecting Cambodia's efforts to keep up with global financial innovations.
The National Bank of Cambodia (NBC) has for the first time allowed commercial banks and payment institutions to provide services involving Category 1 crypto assets, including secured or stablecoins, but unsecured cryptocurrencies such as Bitcoin remain prohibited.…
— Wu Blockchain (@WuBlockchain) December 27, 2024
According to the Prakas, all commercial banks or financial institutions wishing to provide crypto-related services must obtain approval from the NBC. Authorized institutions can engage in the following activities:
- Exchange crypto to fiat currency and vice versa.
- Transfer crypto between accounts.
- Custody crypto assets.
However, entities are NOT ALLOWED to use customers' crypto assets for their own purposes.
Cambodia had banned crypto transactions due to the high risks of money laundering, fraud, and illegal activities in the dark market. According to Cambodian Royal Academy economist Hong Vanak, cryptocurrencies do not bring much benefit to the national economy due to their digital and decentralized nature, and even complicate management, taxation, and ownership tracking.
However, Vanak also acknowledged the increasing global prevalence of cryptocurrencies, which are used not only for payments but also traded like stocks due to their high price volatility, especially unpegged cryptocurrencies. Therefore, "giving the green light" to crypto services may generate significant transaction fee revenue for commercial banks and financial institutions.
According to data from Chainalysis, Cambodia ranked in the top 20 countries with the highest cryptocurrency adoption globally in 2024. However, the use of crypto in Cambodia is often associated with organized criminal activities.
Earlier this month, Cambodia issued a directive to block 16 crypto exchange websites including Binance and Coinbase for not having operating licenses from the Securities and Exchange Regulator of Cambodia (SERC).
Compiled by Coin68
