The National Bank of Cambodia (NBC) has introduced a new regulatory framework to oversee crypto asset activities conducted by commercial banks and payment service providers.
According to the recently issued “Prakas on Crypto Asset Activities,” the NBC has defined and categorized crypto assets to enable targeted regulation of various types of digital assets.
The new rules prohibit financial institutions from engaging in transactions involving high-risk crypto assets. Moreover, all commercial banks and payment service providers must obtain prior approval from the NBC and establish a robust risk management system before conducting crypto asset-related transactions or offering related services.
The regulations also ban commercial banks from issuing their own cryptocurrencies or providing services associated with high-risk crypto assets. Additionally, the total value of crypto assets held by a bank must not exceed 5% of its total capital.
Violations of these rules could result in fines of up to 500 million Cambodian riels (approximately $125,000) per infraction.
The NBC emphasized that the regulations aim to balance fostering innovation and mitigating financial risks to ensure stable industry development.
Approved crypto assets must be linked to specific “reference assets,” such as fiat currencies (e.g., USD), commodities (e.g., gold or oil), asset baskets, or algorithmic stablecoins. As a result, cryptocurrencies like Bitcoin and Ethereum, which lack links to underlying assets, remain prohibited for trading.
With this new framework, Cambodia becomes one of the first Asian countries to regulate crypto asset activities within financial institutions. Industry experts view this as a pragmatic regulatory move by the NBC, focusing on specific activities rather than imposing a blanket ban on crypto assets.
Notably, the NBC has leveraged experience gained from its blockchain-based Bakong system to better understand and regulate crypto assets. Meanwhile, a Cambodian payment service provider was implicated in a large-scale money laundering case involving USD Tether, with transactions exceeding $10 billion.