Comment on "Design of CBDC in a Highly Dollarized Emerging Market Economy: The Case of Cambodia".

The article discusses the implementation and implications of Cambodia's Central Bank Digital Currency (CBDC), known as Bakong. The National Bank of Cambodia (NBC) launched Bakong in October 2020 with the goals of reducing dollarization, preventing the spread of COVID-19, and promoting efficiency and inclusion. However, it is unclear how introducing the CBDC will achieve a reduction in dollarization or improve efficiency and resilience. The adoption rate of Bakong among shops is extremely low, potentially due to limited additional value compared to existing mobile payment services. CBDCs have the advantage of being legal tenders and theoretically safer than privately run digital payment services. The low adoption rate of Bakong is not necessarily a concern as long as private payment services remain active, and the CBDC provides an alternative payment tool to ensure financial inclusion and reduce monopoly behavior. The article raises concerns about the negative impacts of CBDCs on the economy and financial system, but these can be addressed through appropriate policy arrangements. The NBC should focus on promoting financial inclusion and improving cross-border transaction efficiency with the CBDC. [Extracted from the article]