Key Points:
- The National Bank of Cambodia (NBC) now permits commercial banks and payment institutions to provide services involving backed cryptocurrencies.
- Institutions must obtain NBC approval and are prohibited from misusing customers’ crypto assets for institutional purposes.
The National Bank of Cambodia has given the green light to commercial banks and payment institutions to offer services that involve Category 1 crypto assets, which also include asset-backed stable cryptocurrencies.
Read more: 16 Cambodian Crypto Exchanges Banned From Website Access
National Bank of Cambodia Issues Guidelines for Crypto Services
The use of unbacked cryptocurrencies, like Bitcoin, remains strictly prohibited. The policy change was enshrined in a December 26 directive and was announced by the National Bank of Cambodia on December 27.
The new regulation marks one of the most important steps towards putting Cambodia in line with the rest of the world’s financial developments while ensuring full oversight over digital currencies. The directive has set a framework for institutions willing to engage in crypto-related activities: exchanging crypto assets for traditional currencies, transferring crypto assets from one account to another, and providing custody services.
Balancing Innovation and Risk in Digital Finance
To operate, the institutions must get approval in advance from the NBC and follow strict guidelines that prevent the misappropriation of customer crypto assets for institutional purposes.
The move signals a new tack taken by Cambodia regarding digital currencies. The Cambodian government banned cryptocurrency transactions and trading based on concerns involving money laundering, fraud, and general illegal activities on the black market. By differentiating between backed and unbacked crypto assets, NBC plans to reduce such risks while allowing innovation in the digital finance sector.
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