NBC seeks riel accounts for all businesses
NBC seeks riel accounts for all businesses
The National Bank of Cambodia (NBC) and the Ministry of Commerce (MoC) on Tuesday asked all banking and financial institutions (FIs) to cooperate in opening bank accounts in KHR for all businesses registered in Cambodia.
According to a notice, the initiative is to strengthen the implementation of the law on commercial enterprises and to promote the use of riel in businesses, as well as to maintain financial stability.
“It should also be noted that the use of riel is important to strengthen the implementation of national macroeconomic policies, especially to maintain price stability, reduce operating costs, accelerate de-dollarization, support exports and investment and increase international reserves. It also helps in strengthening national identity and sovereignty,” the notice said.
Recently, NBC planned to integrate both KHR and the USD payment systems using a single KHQR code. This will enhance the use of KHR and facilitate cross-border payments with partner countries.
The single KHQR project, which requires all users to have a riel account, is expected to boost the national economy through the use of riel, the national currency.
Accordingly, banks in Cambodia automatically open riel accounts for users and also free of charge, even if the account is not used or is inactive. All bank customers in Cambodia will be able to scan both KHR and USD through the same KHQR system without having to scan the QR codes in USD and KHR separately.
Chea Serey, Governor of NBC, said recently that, when the project is implemented, digital payment transactions can be made in both KHR and USD by simply scanning the KHQR code. Currently, it is divided into two parts — KHQR code for KHR and KHQR code for USD.
Payment by KHQR will require customers and sellers to have riel accounts to complete the payments, but those with only US dollar accounts will not be able to make payments using KHQR, she said.
She added that the project will also reduce the complexity of digital payments, allowing individuals and business owners to make payments more easily and simply by scanning a single QR code for transactions in both KHR and USD.
The project is designed to make the use of riel easier and facilitate foreign tourists in Cambodia to pay through the Bakong system, Serey said.
In addition, those who have a riel accounts can make payments in many countries such as Thailand, Vietnam, Laos and others that have partner banks using cross-border payment transactions via KHQR.
More riel in the market improves the effectiveness of the monetary policy. This will help NBC to enhance macroeconomic policy management and sustain the economic development of the country as money supply has a close relationship with production and employment.
The dependence on the USD leaves Cambodia vulnerable to economic shocks in the US economy. If riel is the main currency, the central bank can play the role as lender of last resort.
The use of riel can also help the government gain seigniorage (revenue received from issuing banknotes).
