Cambodia Grants Banks Approval for Stablecoin Offering

The National Bank of Cambodia (NBC) now permits commercial banks to offer stablecoin services. This marks a major shift in the country’s approach to digital assets. The move opens up new opportunities while trying to manage the risks tied to crypto.

A Big Step Toward Regulation

On December 26, the NBC released a directive that allows banks and payment institutions to engage with Category 1 crypto assets. These assets include stablecoins like USDT and USDC, which maintain a fixed value tied to reserves. 

Unlike volatile assets like Bitcoin and Ethereum, stablecoins are seen as safer. The directive allows approved institutions to exchange crypto for fiat, transfer assets, and offer custody services. 

However, banks must first get approval from NBC before starting any crypto-related services. The rules also ensure that financial institutions cannot use customer assets for their own purposes. This is to protect users and prevent misuse.

Cambodia’s Changing Crypto Landscape

Historically, Cambodia has been wary of cryptocurrencies. The government banned trading and transactions, fearing high volatility and misuse. But with the rise of global cryptocurrency adoption, the country is beginning to shift. 

Cryptocurrencies now play a role in payments, trading, and investments worldwide. Economic researcher Hong Vanak points out that while these innovations offer new possibilities, they bring challenges in regulation and taxation.

By allowing financial institutions to offer stablecoin services, the country seeks to tap into new sources of revenue while ensuring proper regulation. The decision could reshape Cambodia’s financial sector, offering both stability and innovation.