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Dr Chea Serey, Governor of the National Bank of Cambodia, has urged the youth to exercise caution while investing in cryptocurrencies without properly understanding the risk factors associated with them.

Talking to CNBC, on the sidelines of the Singapore Fintech Forum, Serey said there are obviously bad actors and abuses in the world of cryptocurrencies.

Cambodia has taken a relatively tough stance on cryptocurrency, with the NBC issuing a directive as early as in 2019 banning all forms of cryptocurrency transactions in the country. The ban has been implemented through financial institutions and payment processors, effectively preventing any crypto trading within Cambodias borders.

However, this ban doesnt apply to those individuals willing to invest their money in cryptocurrencies.

There is always confusion about crypto and blockchain and I am a blockchain enthusiast and as a matter of fact the Bakong Payment System the NBC has been pioneering is based on blockchain technology. We can definitely use blockchain for very good cause, she pointed out.

The NBC Governor drew an analogue between fanatic crypto enthusiasts and children who treasure marble balls. Marble balls are of great importance to children and there is nothing wrong with a child exchanging them for a snack or even his/her shoes as there is a value to it. But you cant go around and tell everyone that the marble ball has great value and could be stored as an asset for the future.

And this is the same as cryptocurrency. If you value it there is nothing wrong for you to accept it. But dont go around and tell others that this is the future.

These days lot of kids go into the crypto world with the mindset that it is one of the fastest growing assets. They are under the illusion that crypto offers quick money. But they have no idea about the risks involved in it and this is the danger.

Dr Chea Serey said the memorandum of understanding (MoU) signed on Cross-border QR Code Payment Cooperation between the National Bank of Cambodia and AliPay Connect is a great initiative, pointing out that it offers interoperability between Cambodias mobile users and the Alipay Plus merchants.

As we know, there are close to 83 million Alipay merchants and it means that Cambodian citizens who travel abroad will be able to make payments to any of these merchants from their own banking accounts. And, vice versa, any users of Alipay Plus can come to Cambodia and make payments to our QR standards.

This is an important step to promote tourism in the country. As a country, we depend a lot on tourists and this would make the tourism experience in the country much more convenient for foreigners. The move will also boost the local economy as small businesses will be able to sell more with tourists finding easy payment options.

Serey said financial inclusion and de-dollarisation of the economy remain the top two priorities of NBC. The promotion of digital payment system is very much the need of the hour. From a customers perspective, it will create a footprint on his/her financial behaviour giving easy access to the credit systems.

She said that NBC wants to make the usage of local currency more convenient and therefore the digital form of it would definitely help because there would be no longer a requirement to carry huge stacks of currencies to make payments.

Most importantly, the idea is not to eliminate the cash from the economy as cash will always be the king. It is just to encourage the people who are able to be digitally literate to adopt this payment system.

And we have to be mindful that not everyone is digitally literate and if you force them into using this it could create another set of problems. There are issues such as cybersecurity, hacking, identity theft and so on. Definitely, we dont want to move completely away from the existing system, but the objective is to offer alternatives.

Read more:
NBC chief cautions youth over cryptocurrency risks - Khmer Times