Cambodia Officially Allows Type 1 Crypto Services

The National Bank of Cambodia (#NBC ) has for the first time allowed commercial banks and financial organizations to provide services related to Type 1 crypto assets, including backed cryptocurrencies such as stablecoins. This circular was issued on December 26, marking an important step in modernizing the financial system of this Southeast Asian nation.

According to regulations, licensed financial organizations may perform:

  • Exchanging crypto for fiat currency (#fiat ) and vice versa.

  • Transferring crypto between accounts.

  • Custody of crypto assets.

However, organizations are not allowed to use customers' crypto assets for their own purposes.

Bitcoin and Unbacked Cryptocurrencies Remain Banned

Although it has opened up to stablecoins and Type 1 crypto assets, #Campuchia continues to maintain the ban on Bitcoin and unbacked cryptocurrencies. The main reason given by NBC is the high risk associated with money laundering, fraud, and illegal activities.

Economist Hong Vanak from the Royal Academy of Cambodia states that cryptocurrency does not bring many benefits to the national economy and even complicates management, taxation, and ownership monitoring.

The Driving Force Behind the New Decision

Cambodia is striving to catch up with the global popularity of crypto. The new regulations aim not only to enhance management but also to capitalize on revenue potential from user transaction fees for financial organizations.

Data from Chainalysis shows that Cambodia ranked among the top 20 countries with the highest levels of crypto usage in the world in 2024. However, this is mainly related to organized crime activities, prompting the government to take stronger action.

In early December, Cambodia blocked 16 crypto exchange websites for operating without a license from the Securities and Exchange Commission of Cambodia (#SERC ).

Conclusion

Cambodia's new decision is a significant step in accepting blockchain technology while still maintaining a cautious stance towards unbacked crypto assets like $BTC . This reflects the country's dual goals: to promote financial innovation while ensuring security and strict control.