Cambodiaâs economic context
Cambodiaâs economy is heavily dollarized. According to research from the ISEAS â Yusof Ishak Institute, the Cambodian government estimates that over 80 % of all transactions are conducted in U.S. dollars. The countryâs central bank (NBC) therefore launched the Bakong digital payment system to promote use of the local riel. Bakong has already shown strong adoption: by 2023 more than 10 million Bakong wallets were active and around 200 million transactions were processed . This surge shows that Cambodians are eager to use digital money. The World Economic Forum notes that by early 2022 the system already had 5.9 million users and handled US$2 billion in transactions; at least 200 000 previously unbanked people gained access to the formal financial system . Other surveys show that cryptocurrency use is rising; Cambodia ranked 17th globally in crypto adoption, with the domestic market projected to reach US$7.9 million and 539 000 users by 2025. This growth has been driven by remittances and peerâtoâpeer payments among young peopleâ97 % of crypto users are under 35 .
However, Cambodia remains vulnerable to external shocks. The World Bank notes that rising remittances and tourism receipts offset a widening trade deficit, but inflation accelerated to 3.7 % in March 2025 due mainly to food prices . In Phnom Penh, food inflation reached 5.2 % . Because most transactions are in U.S. dollars, Cambodiaâs purchasing power is tied to U.S. monetary policy. When the U.S. raises rates or prints money, Cambodians feel the impact without having any influence. Additionally, more than 70 % of Cambodians remain unbanked , and remittances (about US$1.5 billion in 2019) equate to roughly 6 % of GDP âyet traditional remittances are slow and expensive.
Why Bitcoin could help Cambodia now
- A hedge against currency risk: Bitcoin has a fixed supply (21 million coins) and is independent of any government. The World Bankâs inflation figures show that even modest price rises reduce purchasing power. Bitcoinâs scarcity makes it immune to devaluation from money printing; unlike the U.S. dollar, no central authority can create more. Holding some bitcoin therefore offers Cambodians an asset that is not tied to the U.S. Federal Reserve or political decisions abroad. The U.S. government itself is considering Bitcoin a strategic reserve assetâan executive order signed in March 2025 created a strategic bitcoin reserve funded by seized bitcoins; the U.S. already holds around 200 000 BTC . A Reuters analysis notes that the reserve could eventually accumulate one million bitcoins, about 5 % of the total supply, as a hedge against inflation and as a strategic resource in crises . If a superpower like the U.S. sees strategic value in bitcoin, smaller countries such as Cambodia could also benefit from holding a reserve of digital hard money.
- Financial inclusion and empowerment: Because Bitcoin transactions can be sent from a smartphone without a bank account, they open financial services to the 70 % of unbanked Cambodians . Bakong has shown that Cambodians are comfortable with QRâcode payments and mobile wallets . Adding Bitcoin support through regulated exchanges or integrated with Bakong could let users save, send and receive value without the fees charged by remittance companies or the restrictions of banks. The decentralized nature of Bitcoin also makes it censorshipâresistant; Ledgerâs analysis points out that no bank or government can arbitrarily freeze or confiscate funds on the Bitcoin network . For citizens facing corruption or political instability, the ability to hold money that cannot be seized is empowering.
- Cheaper, faster remittances: Remittances are vital to Cambodian households . Traditional wire transfers can cost 5â10 % and take days. Bitcoin allows crossâborder transfers in minutes at a fraction of the cost, especially when paired with secondâlayer solutions like the Lightning Network. Countries such as El Salvador have reduced remittance costs by adopting Bitcoin. Cambodia could similarly lower the cost of sending money from migrant workers abroad, increasing disposable income for families.
- Youth-driven innovation: Surveys show that over twoâthirds of crypto users in Cambodia are aged 18â24 and 97 % are under 35 . Harnessing this techâsavvy demographic can foster a vibrant fintech sector, attract foreign investment and create jobs in blockchain development, cybersecurity and digital finance. Encouraging innovation would help diversify the economy beyond garments and tourism.
- Reducing dependency on the U.S. dollar: The governmentâs restrictions on foreign crypto exchanges were partly intended to promote demand for the riel and reduce dollar dependence. Paradoxically, a balanced Bitcoin strategy could complement this goal: by diversifying reserves from only U.S. dollars to include a fixedâsupply digital asset, Cambodia could strengthen its monetary sovereignty. Local exchanges could offer cryptoâtoâriel trades and integrate with Bakong, encouraging people to transact in riel while still benefiting from Bitcoinâs global liquidity.
Strategic advantages in war and national security
Lessons from Ukraine and Russia
Digital assets have already played a significant role in modern conflict. When Russia invaded Ukraine in February 2022, Ukraineâs banking system faced runs and traditional payment channels were disrupted. The Ukrainian government posted Bitcoin and Ethereum wallet addresses on social media, and within weeks over US$56 million of cryptocurrency donations poured in ; by February 2023 the total had reached nearly US$70 million . A study by the Center for European Policy Analysis (CEPA) found that crypto fundraising eventually brought in US$225 million in cryptocurrencies and US$190 000 worth of NFTs, with roughly US$134 million used for humanitarian aid and US$91 million for military equipment . These funds bought drones, bulletproof vests, medical supplies and other critical items.
On the other side, Chainalysis discovered that proâRussian militias used cryptocurrency to raise more than US$2.2 million; donations bought drones, weapons, radio equipment, medical kits and even components for UAVs . The same report shows that small amounts can make a huge differenceâ15 radios cost only US$630 . Furthermore, groups like Terricon explicitly used cryptocurrency to evade sanctions, offering NFTs and using mixers to hide funds . This dual use illustrates that Bitcoin is a neutral tool: it can fund humanitarian defense, but it can also be misused by criminals. Proper regulation and transparency are therefore essential.
A digital lifeline during the ThaiâCambodian conflict
Cambodia is currently in the middle of its worst border conflict with Thailand in decades. Since May 28 2025, heavy artillery, rocket fire and Fâ16 airstrikes have devastated towns near the Preah Vihear and Ta Moan Thom temples; at least 32 people have been killed and thousands displaced . Thailand declared martial law in several provinces and both sides accuse each other of using cluster munitions . In such a volatile environment, supply chains can be disrupted, and access to financial services may be limited.
Bitcoinâs decentralized network could act as a financial lifeline if traditional banking channels are disrupted. Donations from Cambodians abroad and international supporters could be sent instantly to relief organizations or civilian communities, bypassing any blockades. Bitcoin can also serve as a mobile store of value for refugeesâunlike gold or cash, it can be memorized as a seed phrase and transported discreetly across borders. Bitcoin Magazine argues that Bitcoin functions as a defensive tool because it protects assets from authoritarian confiscation and reduces the incentive for warâonce wealth is stored in an unconfiscatable asset, conquering territory to seize riches becomes less profitable .
A strategic reserve for national security
The idea of a strategic bitcoin reserve is no longer hypothetical. A March 2025 executive order created a U.S. strategic bitcoin reserve. Reuters explains that a strategic reserve is a stockpile of a critical resource used in crisesâlike the Strategic Petroleum Reserve for oil . Trumpâs order envisioned funding the reserve with 198 109 BTC seized by law enforcement and a congressional proposal suggested buying 200 000 BTC per year for five years, which would amount to 5 % of Bitcoinâs total supply . Advocates argue that holding bitcoin could reduce national debt, protect against inflation and give the U.S. leverage over adversaries like China . Even U.S. Vice President JD Vance told an audience in May 2025 that because China has banned Bitcoin, the U.S. should lean into it and build a strategic advantage .
While Cambodia is far smaller, the same logic applies: securing a small bitcoin reserve now could be a longâterm investment. Bitcoinâs fixed supply means early adopters benefit disproportionally when demand increases. For a country with limited natural resources and heavy reliance on foreign currency, a strategic bitcoin reserve could act as a digital âsovereign wealth fundâ, hedging against inflation and providing collateral in times of crisis. It could also send a signal to investors that Cambodia embraces innovation, potentially attracting fintech businesses.
Risks and considerations
Bitcoin is volatile, and its price can swing dramatically. Reuters warns that because of thin liquidity, government purchases or sales could heavily impact the price . Bitcoin also lacks intrinsic utility; critics argue it is âtoo youngâ to be a reliable reserve . Cambodiaâs government therefore needs a balanced, wellâregulated approach:
- Regulation: Cambodia banned unlicensed overseas crypto exchanges in late 2024 to boost riel usage and combat cybercrime. Only two local exchanges (RGX and CNX) are permitted. Adopting Bitcoin would require licensing frameworks, antiâmoneyâlaundering rules and consumer protection to prevent scams. It should also ensure transparent reserves for any governmentâheld Bitcoin.
- Cybercrime: The FinCEN finding from May 2025 notes that Cambodiaâbased Huione Group laundered at least US$4 billion of illicit proceeds, including US$37 million from North Korean cyber heists and US$36 million from crypto scams . This demonstrates that Cambodia already hosts significant cryptoârelated crime. The government must strengthen AML/KYC measures and crack down on scam networks before embracing Bitcoin.
- Volatility management: Any strategic reserve should represent only a small portion of national reserves to avoid overexposure. Cambodia could accumulate bitcoin slowly, buying more during market dips and storing it in multiâsignature wallets with independent custodians.
Conclusion: turning challenges into opportunity
Cambodia faces daunting challenges: a war on its border, dependence on a foreign currency, and an economy vulnerable to external shocks. Yet these challenges also create opportunity. Bitcoinâa borderless, censorshipâresistant, scarce digital assetâoffers Cambodians a tool to protect their savings, send remittances cheaply and empower the unbanked. The countryâs youthful, techâsavvy population and the success of the Bakong digital payment system show that Cambodians are ready for digital finance . Embracing Bitcoinâprudently and with strong regulationâcould provide economic resilience, reduce reliance on the U.S. dollar and even become a strategic asset in times of conflict or geopolitical rivalry. As the U.S. and other nations explore strategic bitcoin reserves , Cambodia has the chance to leapfrog traditional finance and secure a brighter, more sovereign future. The road ahead requires courage and innovation, but the rewardsâgreater financial freedom and resilienceâare worth striving for.