Cambodia Approves Stablecoins, Excludes Bitcoin from Regulations

NBC allows stablecoins and tokenized assets for banks and PSPs. The directive bans Bitcoin but approves limited crypto services. Cambodia aims to boost financial inclusion through stablecoin usage.

Cambodia has taken a decisive step towards integrating digital assets into its economy. The National Bank’s approval of stablecoins and tokenized assets has created new opportunities, but with strict regulations in place to ensure financial stability and security.

Stablecoins Approved, Bitcoin Excluded

Cambodia’s National Bank has approved regulations allowing commercial banks and payment institutions to offer services related to stablecoins and tokenized assets. The directive, which was issued on December 26, 2024, excludes Bitcoin and other cryptocurrencies that are noy backed.

The new rules require institutions to seek approval from the National Bank of Cambodia (NBC) before participating in crypto-related activities. These activities include exchanging crypto assets for fiat currencies, transferring crypto between accounts, and providing custody services. However, institutions cannot use customers' crypto assets for their own purposes.

Stablecoins have gained wider acceptance compared to unbacked cryptocurrencies, such as Bitcoin. Stablecoins can improve monetary independence and financial inclusion as well as facilitate efficient cross-border payments. Therefore, the Cambodian government is cautiously embracing these digital assets to promote financial stability and encourage innovation.

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However, Cambodia still maintains its ban of unbacked cryptocurrencies like Bitcoin. The NBC’s directive is designed to regulate the market carefully and ensure that these assets are used responsibly. Financial institutions must comply with strict measures such as maintaining capital reserves and adhering to anti-money laundering (AML) and counter-terrorism financing (CTF) guidelines.

Cambodia’s approach reflects global trends in countries such as Singapore and Thailand who have implemented comprehensive regulatory frameworks that ensure innovation and consumer protection. Singapore regulates crypto activities under the Payment Services Act, which has boosted innovation while safeguarding financial systems.

The Cambodian government has been cautious due to concerns about the potential for illegal activities in the crypto space. Over the past two years, cryptocurrencies have been linked to organized crime and illegal trade. A darknet trade that laundered funds linked to the North Korean Lazarus Group was operating through Cambodia in 2024 which prompted stricter oversight from the NBC.

The Cambodian crypto landscape is expected to grow, especially with stablecoins gaining traction. However, challenges remain, particularly for small businesses that may struggle with cross-border payments under the current regulatory framework. Therefore, more regulatory measures may be needed to enable a more efficient integration of cryptocurrencies.