Cambodia’s economic context
Cambodia’s economy is heavily dollarized. According to research from the ISEAS – Yusof Ishak Institute, the Cambodian government estimates that over 80 % of all transactions are conducted in U.S. dollars. The country’s 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 peer‑to‑peer payments among young people—97 % 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, Cambodia’s 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 —yet 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 Bank’s inflation figures show that even modest price rises reduce purchasing power. Bitcoin’s 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 asset—an 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 QR‑code 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 censorship‑resistant; Ledger’s 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 5–10 % and take days. Bitcoin allows cross‑border transfers in minutes at a fraction of the cost, especially when paired with second‑layer 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 two‑thirds of crypto users in Cambodia are aged 18–24 and 97 % are under 35 . Harnessing this tech‑savvy 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 government’s 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 fixed‑supply digital asset, Cambodia could strengthen its monetary sovereignty. Local exchanges could offer crypto‑to‑riel trades and integrate with Bakong, encouraging people to transact in riel while still benefiting from Bitcoin’s 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, Ukraine’s 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 pro‑Russian 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 difference—15 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 Thai‑Cambodian 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 F‑16 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.
Bitcoin’s 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 refugees—unlike 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 war—once 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 crises—like the Strategic Petroleum Reserve for oil . Trump’s 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 Bitcoin’s 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 long‑term investment. Bitcoin’s 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 “sovereign wealth fund”, 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 “too young” to be a reliable reserve . Cambodia’s government therefore needs a balanced, well‑regulated 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, anti‑money‑laundering rules and consumer protection to prevent scams. It should also ensure transparent reserves for any government‑held Bitcoin.
- Cybercrime: The FinCEN finding from May 2025 notes that Cambodia‑based 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 crypto‑related 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 multi‑signature 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. Bitcoin—a borderless, censorship‑resistant, scarce digital asset—offers Cambodians a tool to protect their savings, send remittances cheaply and empower the unbanked. The country’s youthful, tech‑savvy population and the success of the Bakong digital payment system show that Cambodians are ready for digital finance . Embracing Bitcoin—prudently and with strong regulation—could 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 rewards—greater financial freedom and resilience—are worth striving for.