The Cambodian government, while pursuing its own cryptocurrency Entapay, has paradoxically banned financial institutions from engaging in cryptocurrency transactions, creating a state of confusion for the country’s cryptocurrency entrepreneurs.
Men Sam An, Cambodia’s Deputy Prime Minister, recently announced the launch of Entapay, a cryptocurrency, and encouraged the company to abide by the company’s laws, according to the The Pnom Penh Post.
Big Plans For Government Cryptocurrency
Entapay is a government supported, multi-functional digital currency payment system consisting of storage management, trading, exchange and offline transactions, according to its website. It can be viewed as a decentralized Alipay application based on blockchain technology.
Entapay derives its name from the Quantum Mechanical Phenomenon of Quantum Entanglement, according to the website, which features secure encryption and transmission of information. As a multi-functional payment system, Entapay removes the inconvenience of managing multi-digital currencies, the laborious process of trading, and insufficient physical trading sites.
Entapay will provide off-line exchange services for other cryptocurrencies.
The website further claims Entapay will replace VISA as the mainstream payment method.
Entrepreneurs Face Uncertainty
Cryptocurrency entrepreneurs, meanwhile, warn that Cambodia’s laws governing cryptocurrency are uncertain, since the government has opposed cryptocurrencies while supporting their technology, according to The Pnom Penh Post.
The National Bank of Cambodia has been reluctant to support cryptocurrency, according to Mean, the lead developer of the Khmer Crypto Foundation. In Mean, who has developed KHCoin, a cryptocurrency, said he understood the government’s uncertainty, given the scams, volatility and lack of regulation that have plagued cryptocurrencies in general.
KHCoin is an open source project released under the MIT/X11 license, according to its website. Source code can be found on GitHub at https://github.com/khcoin.
The national bank in December declared cryptocurrency transactions illegal when Mean tried to monetize KHCoin after first offering it for free. The bank banned banks and microfinance institutions from buying, selling and advertising cryptocurrencies.
The nation’s banks, in response, prevented customers from using their bank accounts to buy or sell cryptocurrencies. This made it difficult for people to trade in cryptocurrencies even though the government had not outlawed people from owning them.
Also read: Cambodia’s central bank plans blockchain trials toward cashless economy
National Bank Explores Blockchain
Prior to its December action, the national bank began exploring blockchain technology, which provides the technology for cryptocurrencies. The bank signed an agreement last April with a Japanese firm to develop a blockchain project to track interbank transactions and lending.
Steve Miller, the founder of CryptoAsia, a Cambodia based blockchain group, said the national bank’s project is a private blockchain, which is a database without a verification process, and that the verification process – known as mining – makes cryptocurrencies necessary. He said cryptocurrencies are needed for public blockchains to function properly since they provide the incentive for anonymous participants to secure the system.
The national bank’s restrictions on cryptocurrencies have undermined developers’ efforts to pursue blockchain technology.
Rithy Thul, a blockchain entrepreneur seeking to facilitate overseas remittance payments in Cambodia, said blockchain’s future in Cambodia remains uncertain. He said it is a good sign that the national bank is trying to use blockchain technology.
DApact, a company working to use blockchain technology to connect lenders to borrowers without the need for an intermediary, has launched a $10,000 pilot project in the country, according to its website, and is seeking investors.
Pierre-Marie Riviere, the network lead of DApact, said blockchain technology is already being deployed in the country.
Mean, meanwhile, is still hoping to monetize KHCoin project.