Cambodia’s economy remains heavily dollarized – about 80% of everyday transactions occur in US dollars – and its young, tech-savvy population is eager for digital solutions. These factors converge to make a compelling case for Bitcoin. As an outside currency with a fixed supply, Bitcoin could serve as a hedge against inflation and currency risk beyond the reach of any single central bank . Recent data underscore Cambodia’s digital readiness: Chainalysis ranked it 17th worldwide in crypto adoption (2024) , reflecting grass-roots momentum. Below, we explore how Bitcoin adoption could transform Cambodia’s economy and society – and what challenges lie ahead.
Economic Impact
- Inflation hedge and diversification: Cambodia’s inflation (≈3–4% recently ) and large FX reserves (≈$24.7 billion ) highlight the limits of holding wealth solely in fiat. Bitcoin’s hard-capped supply provides an alternative store-of-value outside any country’s inflationary policy. In a dollarized economy, households and the treasury could “stack sats” (buy Bitcoin) alongside riel and USD to diversify without political friction .
- Dollar dependence: With ~80% of transactions in USD , Cambodia’s fortunes ride on Federal Reserve policy. A depreciation of the dollar or U.S. rate shocks can ripple through Cambodia’s economy. Bitcoin, by contrast, is “sovereign-neutral” – no foreign central bank can debase it . In effect, adopting Bitcoin could partially decouple Cambodia from external monetary shocks and give citizens a parallel currency ladder.
- Digital currency complement: Cambodia’s own digital payment system Bakong (powered by blockchain) already has 10 million wallets and processed over 600 million transactions in 2024 . Bitcoin could complement Bakong: use Bakong/KRiel or USD for local payments, and use Bitcoin as a global store-of-value hedge. In effect, households could hold Bitcoin “safeguards” of wealth while continuing to use local rails for daily transactions.
Political and Monetary Independence
- Financial sovereignty: Bitcoin is decentralized and borderless, which can enhance Cambodia’s monetary independence. By holding some reserves in Bitcoin, the government could reduce reliance on foreign currency systems. For example, Cambodia’s central bank aims to strengthen the riel and reduce dollar dependence ; a modest BTC reserve could hedge foreign exchange risk without undermining local monetary policy .
- Reducing external control: In current practice Cambodia cannot print USD, and its policy is influenced by U.S. monetary policy. Bitcoin, by contrast, is not issued by any government. As a “digital bearer asset,” self-custodied Bitcoin (held in personal wallets) operates outside any single nation’s control . This could be a strategic asset if Cambodia ever faces international sanctions or payment system restrictions, since Bitcoin can be sent peer-to-peer without permission.
- Soft-power and global stance: Joining the growing list of nations and institutions that hold Bitcoin can signal technological leadership to investors. Experts note that having any BTC reserves could enhance Cambodia’s image as an innovative, tech-forward economy . Similarly, living by “hard money” principles (as El Salvador attempted) has a symbolic value: it tells markets that Cambodia is open to cutting-edge finance.
Technological Innovation
- Youth-driven adoption: Cambodia’s median age is 27 and it is highly connected: ~57% of Cambodians are online and mobile SIM penetration is 145% . Crypto adoption is fuelled by youth: 66% of Cambodian crypto users are aged 18–24 . This tech-savvy demographic is already experimenting with blockchain, making Cambodia fertile ground for crypto-based services.
- Fintech growth and startups: Cambodia has a nascent blockchain ecosystem. For instance, fintech firms in Phnom Penh are prototyping Bitcoin Lightning point-of-sale tools for hostels and cafés, aimed at the 5 million tourists who visit annually . Startups in the FinTech Regulatory Sandbox are bridging Bakong (QR code payments) with Bitcoin rails . In short, entrepreneurs are beginning to “think globally” – using Bitcoin for borderless payments while Bakong handles local transactions.
- Open sandbox and regulation: The government’s cautious openness fosters innovation. In January 2025 the National Bank of Cambodia (NBC) released digital-asset rules: banks may handle stablecoins (Group 1 crypto) but Bitcoin is classified as higher-risk (Group 2) . Meanwhile, the telecom regulator blocked 16 unlicensed foreign crypto exchanges in 2024 to nudge users toward licensed local alternatives . Such steps show regulators balancing oversight with growth. As the policy evolves, a clear framework can give tech entrepreneurs confidence to build blockchain applications for remittances, microfinance, smart contracts, and more.
- Synergy with Bakong & regional QR: Bakong is extending QR payments to neighboring countries (Thailand, Vietnam, China, etc.) . Bitcoin can complement this regional push: tourists and traders could use Bakong for small local purchases (fast QR payments), but rely on Bitcoin for cross-border or large-value transfers. Think: “Bakong for speed, Bitcoin for value.” This dual-rail approach encourages innovation while preserving convenience.
Financial Inclusion
- Huge unbanked population: Cambodia still has a large underbanked population: only ~59% of adults have any formal financial account . In rural areas, 78% have no bank account , even though most adults own mobile phones. This gap presents an opportunity: a Bitcoin wallet on a smartphone can serve as a de facto bank account for the unbanked. Compared to opening a bank account (which may require paperwork and travel), installing a crypto wallet is fast and low-cost.
- Mobile connectivity: With 24.65 million active mobile connections (144.7% penetration) and 9.66 million internet users (~57% of population) , many Cambodians have the technology to use digital finance. Bitcoin’s peer-to-peer nature means anyone with a smartphone and an internet connection can send, receive, and store value. This can empower gig workers, smallholder farmers, and city dwellers alike to save and transact without a traditional bank.
- Beyond credit scores: Traditional lending often excludes those without formal records. Emerging blockchain solutions can leverage alternative data (mobile payment history, digital footprints) to assess creditworthiness . While not unique to Bitcoin, crypto-based financial services (like DeFi protocols) could use this data to offer microloans or savings products to Cambodians previously shut out of formal finance. In this way, Bitcoin and related tech could expand financial inclusion in a country where informal lending is common.
- Reducing remittance reliance on banks: For the underbanked receiving remittances, Bitcoin can deliver funds without intermediaries. A migrant’s earnings sent in Bitcoin (or a stablecoin on-chain) would deposit directly into the recipient’s wallet, rather than going through expensive money-transfer operators. This direct model offers financial access to those with no bank, at minimal fees.
Remittances and Cross-Border Payments
- Large remittance flows: Cambodians working abroad send home a significant sum – an estimated $2.95–3.0 billion in 2024 . These inflows (nearly 6% of GDP) are lifelines for rural households. The top sending countries are Thailand (∼73% of inflow), South Korea, Malaysia, etc. . Yet much of this money never reaches families – fees are high.
- High transfer costs: Even after improvements, Cambodia’s remittance fees remain among Asia’s highest. In 2020 the average cost was about 11.7% of the amount sent – far above the 3% global SDG target. At this rate, Cambodian migrants lost roughly $140 million in fees that year . Every percentage point cut could deliver millions more to families.
- Bitcoin for efficiency: Bitcoin (especially via Layer-2 protocols like Lightning) can slash cross-border fees to pennies . In practice, sending BTC from, say, Singapore to Cambodia requires only a tiny network fee and minutes for settlement – instead of the multi-day, multi-percent service fees of banks or remittance agencies. For a migrant family, converting hard-earned wages to Bitcoin and then selling it in Cambodia (or vice versa) could boost net income significantly.
- Digital remittance priority: The World Bank and development agencies highlight cheaper digital remittances as key to economic growth . Cambodia’s own trials with Bakong (e.g. allowing Malaysian Maybank users to send to Cambodian e-wallets for almost zero cost ) show the demand. Bitcoin is the most mature borderless rail available today. If paired with local on/off-ramps, it could complement Bakong for regional money transfers (even outside ASEAN), ultimately saving workers’ families time and money.
Banking Infrastructure and Access
- Legacy gaps: Cambodia’s banking system is still developing. Many rural towns lack bank branches, and cash remains king. Historically, shoppers priced goods in USD because it’s stable – a clear sign banks and the national currency have limited reach. Efforts like Bakong aim to “de-dollarize” retail transactions and bring everyone onto one platform , but adoption takes time.
- Smartphones vs. branches: Strikingly, over 78% of Cambodians have no bank account , yet more than half own smartphones. This mobile penetration suggests a leapfrogging opportunity: instead of waiting decades for bank branches, the country could leap ahead via mobile finance. Bitcoin wallets work on the same devices people already use for social media – training users might be easier than ever.
- Reducing remittance burdens: Banks and payment firms in Cambodia currently handle cross-border transfers once or twice daily, often at high cost. Bakong already cut interbank payment times from hours to seconds . In theory, Bitcoin could eliminate many of these banking frictions for retail transfers. For example, instead of routing remittances through multiple correspondent banks (each taking a fee), a direct crypto route can bypass them entirely.
- Alternative to banking constraints: Cambodia’s NBC has encouraged banks to embrace digital finance (even launching the world’s first retail DLT-based payments system ). Bitcoin could provide a parallel system. Because it needs no licensed financial intermediary for peer-to-peer transfers, it sidesteps some compliance burdens. Of course, regulatory frameworks must evolve (see below), but the fundamental infrastructure need – a simple way to send and store value – is already in Cambodians’ hands via mobile networks.
Challenges and Considerations
- Volatility and risk: Bitcoin’s price swings are its biggest hurdle for everyday Cambodians. For a poor farmer or factory worker, losing 10% of savings overnight is not acceptable. Solutions include using Bitcoin savings only for long-term wealth (like a digital gold) and relying on stablecoins or riel for daily expenses. Education will be crucial: only well-informed users should take on Bitcoin’s risks.
- Infrastructure gaps: About 43% of Cambodians were still offline as of 2024 , especially in rural areas. Without reliable internet, crypto wallets can’t be used – although offline “POS agents” or SMS-based solutions could help. Power outages and smartphone costs are also barriers. These challenges mean that a Bitcoin rollout must go hand-in-hand with boosting connectivity and digital literacy.
- Regulatory clarity: Cambodia’s regulators remain cautious. Banks and licensed firms can handle stablecoins (group 1), but unbacked cryptocurrencies like Bitcoin are classified as higher-risk (group 2) . Some exchanges have been blocked pending local licensing . For Bitcoin to flourish, clear rules are needed (for taxes, anti-money-laundering, custodianship). Advocates suggest treating self-custodied Bitcoin like “digital cash” that can flow freely at the on/off ramps ; doing so would require new laws and public education.
- Security and scams: Cambodia has seen illicit crypto activity (e.g. scam marketplaces processing large volumes ). New Bitcoin users would need protection from fraud and theft. This means developing trusted local exchanges or peer-to-peer networks with good reputations, plus strong consumer protection. At the same time, Bitcoin’s transparent ledger could actually reduce some corruption – transactions can be audited – but implementing that requires oversight.
- Competing alternatives: Some argue that stablecoins or a stronger digital riel could address these issues without the full volatility of Bitcoin. Indeed, Cambodia’s own CBDC-like Bakong and potential regional digital currencies (e.g. a digital yuan in ASEAN) offer other paths. The flipside: only Bitcoin (and its peers like Ethereum) have a proven history as global decentralized money. Whether Bitcoin or another crypto becomes dominant will depend on technical, regulatory, and user-preference factors.
- Balancing act: Ultimately, the goal is to empower Cambodian citizens. Any adoption of Bitcoin should emphasize financial inclusion and innovation while mitigating risks. The government’s current sandbox approach , plus public crypto education campaigns, can help. If done right, introducing Bitcoin could allow everyday Cambodians to “stake their claim” in a future digital economy.
Inspiringly, Cambodia’s situation is ripe for leapfrogging old models. By building on successes like Bakong and mobile money, Cambodia can integrate Bitcoin in ways that boost its fintech edge. Embracing crypto offers a vision of progress: faster, cheaper payments; new entrepreneurial opportunities; and a stronger, more independent financial system. With prudent policy and public engagement, Bitcoin could become a tool for empowerment – turning Cambodia’s unbanked into active participants in a global economy, and its economy into a pioneer of digital innovation.
Sources: Official data and recent reports have been used throughout (see citations). Notable figures include Cambodia’s remittance inflows (~$3 billion in 2024 ), mobile penetration (24.65 M connections in 2024 ), financial inclusion (59% with formal accounts ), and blockchain adoption (Chainalysis rank 17th ). All information is drawn from reputable industry publications and Cambodian news sources.