Cambodia has been selected to pilot a new blockchain-based platform called Universal Trusted Credentials (UTC). This digital credentialing system is developed by the United Nations Development Program (UNDP).
The Dfinity Foundation, the developer behind the Internet Computer blockchain, will collaborate with the UNDP for this program.
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The Internet Computer blockchain will provide the necessary infrastructure to secure and manage UTC. This initiative, launched last November, aims to boost the participation of micro, small, and medium enterprises (MSMEs) in the digital economy.
Singapore’s Monetary Authority, along with other bodies, has also collaborated with the UNDP on this project.
Digital ecosystem in the making
The pilot program in Cambodia is just the beginning. Over time, it will expand to ten countries. Dominic Williams, Founder of the Dfinity Foundation, emphasized the importance of MSMEs, stating:
“By using the Internet Computer blockchain technology, the UTC initiative will benefit from over a thousand person-years of research and development, supported by leading cryptographers and experts in digital identity.”
In May, the Monetary Authority of Singapore (MAS) and the Bank of Ghana completed a proof-of-concept using UTC. This project used a semi-fungible token (SFT) to transfer licenses and trade records.
Know Your Customer (KYC) verification can also be included in an SFT. Marcos Neto, UN Assistant Secretary General and Director of UNDP’s Bureau for Policy and Programme Support, said:
“By harnessing cutting-edge technology, we can create a more secure and accessible digital credentialing system that will drive sustainable development and economic growth.”
Recent developments in Cambodia’s digital finance
Chea Serey, the Governor of the National Bank of Cambodia, has been proactive in enabling cross-border payments through Bakong, the country’s digital currency payment system.
Recently, Cambodia signed deals with three Korean banks to help migrant workers remit funds home. In an interview, Serey highlighted that this move is part of a strategy to encourage the use of the local currency, riel, in an economy where more than 80% of transactions are conducted in U.S. dollars.
In 2020, the National Bank of Cambodia launched the Bakong tokenized currency payment system. Initially, it was seen as the first live central bank digital currency (CBDC), but it’s closer to being a tokenized deposit system using central bank infrastructure.
The Bakong app links to both riel and dollar bank balances, although users don’t need a bank account. This system has seen huge success, with ten million wallets created out of a population of 17 million and $70 billion in transactions since its launch.
Reporting by Jai Hamid
