Τhe National Bank of Cambodia (NBC) has recently approved commercial banks and payment institutions to offer services with cryptocurrencies that are either stablecoins or backed by other secure assets.
They aim to integrate more secure and stable cryptocurrency operations within the financial system while continuing to prohibit unbacked cryptocurrencies like Bitcoin.
Strict Regulations to Foster Stability
The new guidelines stipulate that any financial institution aiming to provide cryptocurrency-related services must first secure approval from the NBC. Approved activities include the conversion of cryptocurrency to fiat currencies and vice versa, transferring cryptocurrency assets between accounts, and providing custody services.
However, these institutions cannot use their clients’ cryptocurrency assets for personal institutional operations, ensuring a clear separation of assets to protect users.
Crackdown on Unregulated Exchanges
Concurrent with these regulatory advancements, Cambodia has taken a firmer stance on unregulated cryptocurrency exchanges. Earlier this month, authorities blocked access to 16 major cryptocurrency exchange websites, including prominent names such as Binance, Coinbase, and OKX.
This move is part of a broader effort to cleanse the digital asset market from high-risk activities like money laundering and fraud, which are often associated with unregulated platforms.
The crackdown extends beyond just websites, as the Telecommunication Regulator of Cambodia (TRC) also targeted 102 sites primarily associated with online gambling.
Despite these website bans, mobile applications for these platforms remain accessible, posing ongoing challenges in enforcing these regulations fully.
Cambodia’s Growing Crypto Market Amid Regulations
Despite stringent measures against unregulated platforms, Cambodia continues to emerge as a leading nation in per capita retail cryptocurrency usage, as reported by Chainalysis. This reflects a complex landscape where, despite governmental controls, there is significant public engagement with digital currencies.
Regulated banks and payment institutions now entering the crypto space might offer safer and more compliant channels for these transactions, potentially driving further adoption in a controlled environment.