Cambodia embraces stablecoins with new law, but Bitcoin and Ether are still banned

Cambodia has finally cracked the door open to crypto—kind of. For the first time, the National Bank of Cambodia (NBC) is letting commercial banks and payment companies handle stablecoins and other cryptos backed by real-world assets.

But if you’re a Bitcoin or Ether enthusiast, don’t get excited. Those are still banned, and the government isn’t budging on that. This step was announced on December 27 after a directive was issued the day before.

This new law gives stablecoins a green light but comes with a truckload of conditions. Financial institutions have to play by the NBC’s rules.

Cambodia’s messy history with crypto

Cambodia has always been allergic to crypto. Before now, trading them was straight-up illegal. Officials blamed it on risks like money laundering, scams, and shady black-market dealings. These coins have been public enemy number one for years.

But it’s not like they didn’t notice the global crypto boom. As crypto gained traction worldwide, the NBC decided it needed to catch up without losing control. Enter the prakas of December —a measured, tightly regulated approach to crypto adoption.

The decentralized nature of cryptos makes them a nightmare for regulation, taxation, and tracking. Still, he admitted banks could rake in revenue through user fees if they jump into crypto. Back in 2020, the NBC launched Bakong, its own central bank digital currency (CBDC).

Bakong was meant to reduce the country’s dependence on the US dollar and give people a local, digital payment system. By late 2024, Bakong allegedly had 200,000 active users and had processed 1.4 million transactions worth $500 million.

But this year alone, the government blocked access to 16 major crypto exchanges, including Binance and Coinbase, because they didn’t have proper licenses. And yet, Cambodia ranks in the top 20 countries globally for retail crypto use per capita.

Around 70% of transactions happen through centralized exchanges, proving that Cambodians are finding ways to embrace crypto, even with all the red tape. Statista estimates Cambodia’s crypto market will generate $8 million in revenue by the end of 2024. However, growth is expected to slow down in 2025 as regulations tighten and competition from global players ramps up.

The challenges of crypto in Cambodia

It’s not all smooth sailing for Cambodia’s crypto experiment. The government’s strict rules come from a place of fear. The UN Office on Drugs & Crime has actually flagged Cambodia as a hotspot for crypto scams.

There’s also a massive knowledge gap. The NBC has stressed the importance of public education about crypto risks, but that’s easier said than done. Without proper awareness, Cambodians continue to fall victim to scams.

And then there’s the infrastructure problem. While Bakong set the stage for digital payments, it’s not enough. Platforms like Royal Group Exchange (RGX) are still in the early stages, operating under a regulatory sandbox set up by the Securities and Exchange Regulator of Cambodia (SERC).

The sandbox allows companies to test services under close government supervision, but scaling these efforts will take time, money, and trust. For now, the NBC seems content to stick with stablecoins.

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