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Speaker 1: Welcome to Kobe time, a podcast series on markets and

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Speaker 1: economies from devious group research. I'm Kimberly Beck, chief economist

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Speaker 1: welcoming you to our idiot episode

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Speaker 1: today. We will discuss digital finance with the practitioner at

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Speaker 1: the highest level and at the national level.

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Speaker 1: Sarah is an assistant Governor at the National Bank of cambodia.

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Speaker 1: He has led the country's let's talk about money campaign

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Speaker 1: which aims to promote financial inclusion, particularly among women and

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Speaker 1: has paved the way for successful incorporation of financial literacy

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Speaker 1: in the general education program in cambodia

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Speaker 1: as a chairperson of the national clearinghouse operation committee. Sarah

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Speaker 1: has also been involved in the project, a flagship initiative

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Speaker 1: of the National Bank of cambodia, focused on introducing electronic

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Speaker 1: money for the interbank payment transactions. I have been looking

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Speaker 1: forward to this conversation for a while. Welcome to copy type.

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Speaker 2: Thank you for having me.

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Speaker 1: It's great to have you and I'm glad that you're

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Speaker 1: having some coffee to go with this discussion. Great, but

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Speaker 1: before we talk about financial literacy inclusion and really, really

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Speaker 1: interesting initiatives that we've been working on. Let's start with

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Speaker 1: the bread and butter Central banking question,

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Speaker 1: what's your view on the prevailing interest rate inflation situation?

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Speaker 2: Mhm.

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Speaker 2: Unfortunately, I don't have any strong view. I think it's

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Speaker 2: too early to um come up with any real assessment.

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Speaker 2: Um I mean nobody, you know, experienced the kind of

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Speaker 2: the situations that we've experienced the past

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Speaker 2: 2, 2.5 years. The pandemic really, you know,

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Speaker 2: put us back to, you know, go back to the

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Speaker 2: very basic question, you know, what are we doing as

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Speaker 2: central bank really? You know, you've got this supply chain disruption,

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Speaker 2: you've got the whole country, the whole world closing.

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Speaker 2: Um and that that was something that, you know, we

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Speaker 2: everyone was struggling particularly here in cambodia. Remember the

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Speaker 2: the first things that we did before even thinking about

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Speaker 2: other policy is how do we make cash available in

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Speaker 2: the A. T. M. Machines? Right, because we're going to

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Speaker 2: lock down the country and people are going to rush

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Speaker 2: to the machines and and withdraw as much cash as

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Speaker 2: they need. You know, they feel that they would need,

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Speaker 2: and nobody knows how long it's gonna last.

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Speaker 1: So for

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Speaker 2: us, you know, being a dollarized economy, it was a

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Speaker 2: very complicated question because it wasn't the kind of bank

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Speaker 2: notes that we can easily print uh in, you know,

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Speaker 2: in our printing house, we had to import

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Speaker 2: the cash and and then make sure that, you know,

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Speaker 2: people understand that this is short term, even though, you know,

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Speaker 2: we're not even the Ministry of Health, we already, you know,

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Speaker 2: wanted to send that signal, and I'm not sure Ministry

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Speaker 2: of Health at that time were, you know, very happy

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Speaker 2: with it, but we had to do something just to

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Speaker 2: to to tame the worries in the in the uncertainties.

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Speaker 2: But at the same time, make sure that there were

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Speaker 2: cash available subsequently, I think we were one of the

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Speaker 2: first central bank to actually take measures in terms of,

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Speaker 2: you know, allowing banks to restructurings etcetera.

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Speaker 2: Um but that really you know it helped but it

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Speaker 2: was a big blow to the country to the economies

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Speaker 2: as a whole. Um And then you've got the war

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Speaker 2: coming out. You know you thought you were coming out

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Speaker 2: of

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Speaker 2: of the pandemic. You know you have recovery, you thought

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Speaker 2: you know you you have tourists coming in, you will

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Speaker 2: have all these you know

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Speaker 2: supply chain resuming etcetera because we're an export country.

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Speaker 2: Um and so when we can export so we we

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Speaker 2: export a lot to the to the us into the

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Speaker 2: EU one of the main problem is

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Speaker 1: we

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Speaker 2: couldn't X. Shipment was becoming very expensive then the only

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Speaker 2: reason is that we have something to shift to the U. S.

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Speaker 2: But there's nothing to ship back. And so the price

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Speaker 2: was double triple

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Speaker 2: And so we thought okay pandemic is ending happy with it.

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Speaker 2: And then you've got the wall kicking in and now

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Speaker 2: you have the rise of inflation food prices also increase

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Speaker 2: Cambodia for the first time in April. We we've got 7.8%

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Speaker 2: of inflation um

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Speaker 2: One on month. And this this is something that we've

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Speaker 2: never experienced in the past 12. I mean since the

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Speaker 2: global financial crisis actually so there's a lot to take in.

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Speaker 2: There's a lot to you know to to to reflect

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Speaker 2: on and see you know what kind of policy we

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Speaker 2: can do because you know we we we shoot all

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Speaker 2: of our bullet during the pandemic and now this is

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Speaker 2: coming we're like okay

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Speaker 2: collapse it and particularly you know when you're dollarized economy

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Speaker 2: you have to be very creative in your policies. You

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Speaker 2: can't just swallow you know the normal standard procedures that

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Speaker 2: other central bank news because there are so many policy

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Speaker 2: instruments that we we we are not

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Speaker 2: that that is not available to us to use.

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Speaker 1: So does that issue of not having a wide degree

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Speaker 1: of flexibility and tools because of the dollar position issue,

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Speaker 1: which I want to talk to you in greater detail later.

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Speaker 1: But just on that point does that force the Central

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Speaker 1: Bank of committee to coordinate even more intensively with the

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Speaker 1: central government

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Speaker 1: as opposed to a typical economy where they can do

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Speaker 1: a lot of things sort of on their own.

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Speaker 2: Um Not necessarily I think we have some level of

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Speaker 2: independence in terms of you know our monetary policies but

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Speaker 2: you know the things kind of policies like you know raising,

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Speaker 2: we're talking about raising interest rates before that. I mean

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Speaker 2: this is not a policies that you know the National

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Speaker 2: Bank of cambodia can afford to use because this is

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Speaker 2: a great

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Speaker 2: that the central bank, so this is a lending rate

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Speaker 2: in normally local currency, right?

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Speaker 2: Um And for us

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Speaker 2: Because 90% of the bank transactions or 85% of bank

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Speaker 2: transactions are done in US dollar.

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Speaker 2: So it doesn't matter you know what rate we charge

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Speaker 2: for the local currency. People just don't, you know, it

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Speaker 2: it won't reflect onto the market rate.

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Speaker 2: Um So really this is something that we we have

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Speaker 2: to really be more creative and think of something else

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Speaker 2: to do, right? So we we we use you know

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Speaker 2: reserve requirement a lot try to control inflation. Um But

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Speaker 2: the effectiveness is quite limited

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Speaker 2: Because obviously you you can't raise it too high. I

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Speaker 2: mean already prior to the pandemic it was 12.5% of

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Speaker 2: reserve requirement. Never heard of

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Speaker 2: in any country, but it was our policy instrument. It

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Speaker 2: was macroprudential, it was monetary policy instruments. So yeah,

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Speaker 1: I suppose now with the funding costs going up around

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Speaker 1: the world, we are already seeing some degree of

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Speaker 1: tighter liquidity,

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Speaker 1: which is unfortunate for most of Asia where as you

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Speaker 1: were pointing out earlier were just coming out of Covid,

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Speaker 1: this is when the economy needs support, not sort of

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Speaker 1: you know, restraint. I suppose given the dollarization nature of cambodia,

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Speaker 1: this actually is even

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Speaker 1: a greater constraint than it is elsewhere.

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Speaker 2: Um

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Speaker 2: Not necessarily again, um

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Speaker 2: I think the capital outflow usually come when you have

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Speaker 2: a very um

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Speaker 2: very big capital markets, right? Very active capital markets. So

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Speaker 2: money can just flow in and out even though we

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Speaker 2: have a we don't have any capital control regime. Um

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Speaker 2: Our capital market is actually quite small and not very

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Speaker 2: much active. So a lot of the investment that coming

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Speaker 2: into cambodia mostly in the form of FBI.

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Speaker 2: Um and that tend to take a longer time if

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Speaker 2: it were to, you know, to go out. So, um

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Speaker 2: it may slow down the inflow of FBI because of

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Speaker 2: this high interest rate, but the outflow, on the other hand,

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Speaker 2: would take some time and it give us enough time

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Speaker 2: to adjust and see what's going on. And, and usually

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Speaker 2: this is not a phenomenon that we um we have observed,

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Speaker 2: you know, this past year, I mean, at least in

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Speaker 2: my 22 years with the central bank,

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Speaker 2: um even during the global financial crisis. Um, we haven't

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Speaker 2: seen that much of of such

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Speaker 1: things

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Speaker 2: because um likely or not, likely we are capital market

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Speaker 2: is not at the level where, you know, money can

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Speaker 2: just come in and out that easily yet.

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Speaker 1: Right, So, a mixed blessing if you will, let's talk

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Speaker 1: about the key discussion points. So, let's get going with that.

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Speaker 1: You really are passionate advocate about financial technology. Uh and uh,

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Speaker 1: you have been featured in many publications and interviews that

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Speaker 1: I've seen were

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Speaker 1: you've spoken very persuasively about the need for harnessing the

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Speaker 1: technology for the good of the Cambodian society. So, walk

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Speaker 1: us through about how financial technology is changing cambodia in

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Speaker 1: terms of access to financial services and perhaps touching both

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Speaker 1: on the services offered by the public sector as well

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Speaker 1: as the private sector services.

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Speaker 2: I, I am a passionate of financial inclusion and not

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Speaker 2: necessarily financial technology, but if I can use financial technology

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Speaker 2: to further uh, the, our agenda of financial inclusion. So

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Speaker 2: definitely we are going to do it, but

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Speaker 2: I think there there is a sort of a clarification

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Speaker 2: to be made. Is that not all kinds of financial

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Speaker 2: technology will help promote financial inclusion? Some can actually be

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Speaker 2: uh

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Speaker 2: counter productive and can create more risk than than than

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Speaker 2: than anything else. So we need to be cautious.

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Speaker 2: Um, and definitely in adopting new technology, we want to

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Speaker 2: make sure that it is going to help with financial

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Speaker 2: inclusion and, and not the other way around. So that's

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Speaker 2: very important distinctions that we,

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Speaker 2: we have made at the National Bank, is that whatever

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Speaker 2: you introduce, we're fine with it.

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Speaker 2: We're happy to carve, you know, certain specific

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Speaker 2: Rules and regulations just to protect consumer interests, but you

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Speaker 2: have to prove to us that, you know, it served

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Speaker 2: the purpose. And I remember the first time we had

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Speaker 2: our first mobile money. So the wallet provider in Cambodia

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Speaker 2: was in 2009 and before that, the only other, you know,

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Speaker 2: e wallet that we've heard of and who's successful was M. Pesa.

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Speaker 2: And so learning from the experience of M pesa, we actually, um,

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Speaker 2: I think it was with the the I. F. C.

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Speaker 2: So we went around and did a study too. I mean,

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Speaker 2: not me personally. Um, but the bank went around to do,

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Speaker 2: to do a study tours of, in kenya, in South

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Speaker 2: Africa and in the Philippines, trying to see, you know,

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Speaker 2: when you introduced this kind of product, what kind of approach,

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Speaker 2: what kind of regulations regulators should should impose?

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Speaker 2: And we, we had to look at

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Speaker 2: kenya at that time. It was very free. The,

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Speaker 2: well, it provider could do pretty much whatever they wanted

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Speaker 2: and that's how, you know, it was able to grow

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Speaker 2: that fast. And then you've got in South Africa where

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Speaker 2: it was very regulated and then in the Philippines, it

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Speaker 2: was somewhere in between.

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Speaker 2: And so coming back to cambodia, we thought we wanted

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Speaker 2: something in between. And at that time

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Speaker 2: for me, I was a bank regulator back then. And

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Speaker 2: I said, well, the moment you take money from the people,

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Speaker 2: you are a bank, right? And therefore you need to

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Speaker 2: be regulated as a bank.

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Speaker 2: And, and this company, which is, you know, barely a

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Speaker 2: technology provider set,

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Speaker 1: but

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Speaker 2: we don't have the capital of the bank. Um, and

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Speaker 2: we're not a bank, we're just, you know, taking this

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Speaker 2: deposit for, it's an earmark deposit in a way, right?

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Speaker 2: And it was not, you know, saving instrument.

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Speaker 2: And, you know, 2009, you know, we didn't know about

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Speaker 2: all this. And I was absolutely, I said, You, you know, you,

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Speaker 2: you have to ask for allies in the bank at

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Speaker 2: that time, was

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Speaker 1: about

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Speaker 2: the technology was yeah, it's about 30 million in capital

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Speaker 2: think of And they said, we can't do it. And

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Speaker 2: so I said, well, first of all, you don't want

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Speaker 2: to get the license. Second of all, we as a regulator,

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Speaker 2: we don't know what you're doing. This is so new. Um,

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Speaker 2: but we understand that

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Speaker 2: you are going to help a lot of people

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Speaker 2: and bring the informal sector into the formal sector. So

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Speaker 2: we strike a deal. And this is very interesting because

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Speaker 2: this is the regulator striking a deal with with the regulator.

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Speaker 2: We say, okay, since you are a company, if you

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Speaker 2: can find a bank, who can guarantee all your operations

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Speaker 2: financially operationally. Risk management wise,

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Speaker 2: then we will allow you to do it. And so

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Speaker 2: they managed to find a bank to at that time

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Speaker 2: it was a a bank.

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Speaker 2: So am I guarantee all the operation, financially risk management?

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Speaker 2: Because with I I don't know how as a regulator,

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Speaker 2: we're very honest. We said, we don't know how to

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Speaker 2: control you. It's a new animal. But at that time

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Speaker 2: to this company was a subsidiary of A N. Z.

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Speaker 2: And so I said, if you can guarantee everything, I'll

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Speaker 2: let them try. So Ian said then come out and

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Speaker 2: they said, well, I can guarantee everything and it worked.

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Speaker 2: And when it worked, well, we realized, okay, now it's

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Speaker 2: good enough for us to think of a proper regulation

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Speaker 2: to manage these kind of operators and so we

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Speaker 2: issue regulations on licensing of record payment service provider in

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Speaker 2: 2013 and since then we have all, we have, I

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Speaker 2: think now probably 25 30 payment service provider in the country,

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Speaker 2: there's so many new services coming in

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Speaker 2: um and that's how, you know, the, the industry sort

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Speaker 2: of boom since then

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Speaker 1: and so far the experience has been largely positive in

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Speaker 1: terms of, you know, the risk management framework that you

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Speaker 1: laid out has managed to stop

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Speaker 1: um people sort of, you know, savings remaining safe.

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Speaker 2: I mean, it's not, I wouldn't say that we have

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Speaker 2: a perfect rules in place, but what is important for

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Speaker 2: us is to make sure that the money is safe,

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Speaker 2: the message, so the technology is safe and that there

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Speaker 2: is a proper consumer consumer complaint mechanism in place and

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Speaker 2: consumer protection, right? There are three things that we look

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Speaker 2: into and in terms of deposit, um we have quite

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Speaker 2: a strict regulations where, you know, if we are going

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Speaker 2: to regulate you as a mayor technology service provider, then

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Speaker 2: you can't inter mediate the deposit that you received from

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Speaker 2: the

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Speaker 1: customer.

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Speaker 2: So whatever money that they received from the customer,

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Speaker 2: The float of the wallet will have to be 100%

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Speaker 2: deposited with the bank.

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Speaker 2: Um and that is usually unheard of, because I think

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Speaker 2: in some jurisdictions, the company can actually use that money

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Speaker 2: to intermediate, that is to learn and to do other things.

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Speaker 1: Right? So what about the international angle? Because we are

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Speaker 1: seeing social media companies like meta and almost certainly google

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Speaker 1: through WhatsApp, you know, becoming more and more interested in

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Speaker 1: offering payment services through messaging network.

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Speaker 1: And I hear from other central bankers that they worry

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Speaker 1: about the cross border implication, they worry about privacy as

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Speaker 1: well as ability to regulate when these things become

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Speaker 1: part of an international platform. So what is the central

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Speaker 1: bank of cambodia's view in terms of allowing this global

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Speaker 1: social media platforms to get into the payments business in

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Speaker 1: a domestic economy?

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Speaker 2: Well, at the moment, we don't have that phenomenon yet. Um,

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Speaker 2: and I think if it were to come, we will

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Speaker 2: have to discuss the type of service that they want

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Speaker 2: to provide. I mean, at the end of the day,

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Speaker 2: is not to prevent them from doing it because

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Speaker 2: you can't control this big type, right? Um, one thing

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Speaker 2: is to, you know,

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Speaker 2: have a dialogue and see what we can do together

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Speaker 2: and I'm sure this kind of company, they don't want

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Speaker 2: to do anything outside of the regulatory scope. Right? Um,

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Speaker 2: so we we have to sit and discuss, you know, what,

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Speaker 2: what exactly they want to do and see how it

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Speaker 2: can be done safely for the people. And at the

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Speaker 2: end of the day, you know, we have to understand

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Speaker 2: what is it that they want and what is that

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Speaker 2: they have to understand what, why we as regulator uh,

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Speaker 2: worried or want them to do certain things because if

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Speaker 2: we don't understand each other's goal, then

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Speaker 1: we

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Speaker 2: we we tend to um, have this misunderstanding obviously. But

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Speaker 2: you know, do think that can be actually detrimental to the,

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Speaker 2: to the, to the industry.

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Speaker 1: Right. Right.

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Speaker 1: So let's talk about back home

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Speaker 1: and I'm going to assume that many who are listening

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Speaker 1: to this podcast are watching this youtube video will know

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Speaker 1: little about it. But I hope that by the time

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Speaker 1: this conversation is over, they'll want to go and google

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Speaker 1: and and go deep into it. But I would like

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Speaker 1: you to sort of, you know, walk us through the

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Speaker 1: genesis and use case of

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Speaker 2: Yeah, so back um was it was interesting because we

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Speaker 2: we start looking into Blockchain technology in 2016 and I

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Speaker 2: think uh only because we wanted to understand what it was.

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Speaker 2: And I remember when

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Speaker 2: we were one of the first central bank again to

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Speaker 2: come out and say, we don't recognize Cryptocurrency as a currency. Um,

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Speaker 2: and we do not allow Cryptocurrency to be circulated or

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Speaker 2: traded

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Speaker 2: in in in the country. And it's, I mean this

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Speaker 2: will still remain.

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Speaker 2: Um, and so we received criticism about, you know, our

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Speaker 2: central bank being uh

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Speaker 2: backward looking and etcetera. So I thought why not? We,

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Speaker 2: you know, ask a team, why not? We look what

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Speaker 2: into it? And, you know, try to understand and while

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Speaker 2: we look into the technology, there's a challenge that, you know,

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Speaker 2: we we've always wanted to solve, which is financial inclusion

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Speaker 2: and into operability.

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Speaker 2: Um We have banks who can somehow talk to each

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Speaker 2: other through the central clearinghouse with the central bank. So

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Speaker 2: let's say you're a customer of DBS bank and you

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Speaker 2: want to transfer money to your baby bank, right?

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Speaker 2: Um and usually you will send a message to DBS.

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Speaker 2: DBS has an account with

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Speaker 2: With me as you know, as clearinghouse. Then mes credit,

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Speaker 2: you will be account and you will be credit, the

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Speaker 2: customer account or your beneficiary account, right? That's that's how

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Speaker 2: it normally works on on our end. And we have

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Speaker 2: about 50 commercial

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Speaker 1: banks.

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Speaker 2: And so so everything was cleared at the central bank

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Speaker 2: level

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Speaker 2: with a settlement account and and and so on so forth.

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Speaker 2: And also we don't have an RTGS system. So all

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Speaker 2: these clearing are done twice a day.

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Speaker 2: Um It's good and bad at the same time, it

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Speaker 2: saves on liquidity because it it's always done on an

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Speaker 2: acting off basis. But there's also a risk of, you know,

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Speaker 2: it has payment risk, right? That when the time comes

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Speaker 2: to settle, the banks won't have enough liquidity. Um So

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Speaker 2: this is how it works between banks

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Speaker 2: and then you've got the payment service provided that I

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Speaker 2: mentioned to you earlier. Right. Will we regulate as technology

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Speaker 2: uh service provided.

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Speaker 2: They can't use the deposit. They there's there's not much

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Speaker 2: they can do and therefore we have always regulated them

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Speaker 2: as such as a much lesser sort of stringency than

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Speaker 2: we would normally regulate banks. And so the service, the

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Speaker 2: payment service provider acquired a lot more customer

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Speaker 2: uh than banks. Right? Because open wallet is so much

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Speaker 2: easier than going to a bank and open a bank account.

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Speaker 2: The problem with this payment service provider is that they

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Speaker 2: are not talking to each other. So there are bilateral

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Speaker 2: agreement between, you know, two different payment service provider and

379
00:21:43,550 --> 00:21:47,270
Speaker 2: their respective customer can send money to each other. Um

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Speaker 2: but the whole ecosystem just,

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Speaker 1: it was just

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Speaker 2: dysfunctional where, you know, everyone tried sort of to um,

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Speaker 2: to guard their customer base because the moment you open

384
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Speaker 2: your customer to be able to send money to another customer,

385
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Speaker 2: then they will risk of losing their customer. Right? And

386
00:22:03,960 --> 00:22:06,670
Speaker 2: so it's equivalent of, you know, you're using,

387
00:22:07,640 --> 00:22:10,180
Speaker 2: I don't know, sink tell and but you can't call

388
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Speaker 2: your family member who's using what is the other startup, right?

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Speaker 2: It's frustrating, particularly in the financial inclusion. From a financial

390
00:22:21,740 --> 00:22:26,240
Speaker 2: inclusion perspective, it's almost like you put money, but you

391
00:22:26,240 --> 00:22:28,960
Speaker 2: can't use it, you know, whichever way you want.

392
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Speaker 2: And so this is where we wanted to bring the

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00:22:34,100 --> 00:22:38,560
Speaker 2: two industry together. The first of all the payment service

394
00:22:38,560 --> 00:22:44,880
Speaker 2: provided together and the banks together, payment service provided. And

395
00:22:44,890 --> 00:22:48,370
Speaker 2: we were, there was one solution to do, it was

396
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Speaker 2: to why not bring the payment service provider into the

397
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Speaker 2: central clearinghouse

398
00:22:53,040 --> 00:22:57,270
Speaker 2: uh so that they can then settle with the other

399
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Speaker 2: institutions and the problem of bringing the payment service provider

400
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Speaker 2: into the central clearing houses that you have now become

401
00:23:06,560 --> 00:23:09,960
Speaker 2: part of a much bigger uh system.

402
00:23:10,040 --> 00:23:13,110
Speaker 2: And it can become systemic in the sense that if

403
00:23:13,109 --> 00:23:15,170
Speaker 2: a payment service provider can't

404
00:23:15,440 --> 00:23:20,480
Speaker 2: um don't have liquidity to settle, then the all the

405
00:23:20,490 --> 00:23:26,250
Speaker 2: daily settlement will have to come on to a whole. Right?

406
00:23:26,260 --> 00:23:30,260
Speaker 2: And so this also means that the payment service provider

407
00:23:30,260 --> 00:23:34,060
Speaker 2: has to set aside liquidity in the settlement account. They

408
00:23:34,060 --> 00:23:35,060
Speaker 2: have to

409
00:23:35,140 --> 00:23:38,270
Speaker 2: manage it in the same ways as bank would normally

410
00:23:38,270 --> 00:23:41,919
Speaker 2: manage their settlement account. And it become then, you know

411
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Speaker 2: um It beat the purpose of us trying to regulate

412
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Speaker 2: them as a company, as a technology provider in the

413
00:23:50,050 --> 00:23:52,710
Speaker 2: first place because we want, you know, the compliant cost

414
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Speaker 2: to be low so that you know, the lower cost

415
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Speaker 2: is passing on to the people.

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Speaker 1: So

417
00:23:57,880 --> 00:24:00,980
Speaker 2: this is when Blockchain technology come about and this is

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Speaker 2: where the I I find it beautiful. The peer to

419
00:24:03,960 --> 00:24:04,960
Speaker 2: peer

420
00:24:05,040 --> 00:24:09,840
Speaker 2: uh nature of Blockchain can solve the problem. Um So

421
00:24:09,840 --> 00:24:14,030
Speaker 2: instead now of bringing them into the central clearinghouse, we

422
00:24:14,030 --> 00:24:18,520
Speaker 2: introduce back on um and this is like a digital

423
00:24:18,520 --> 00:24:21,770
Speaker 2: money but issued by the central bank.

424
00:24:22,140 --> 00:24:28,430
Speaker 2: Right? So now payment service provider um they can become

425
00:24:28,440 --> 00:24:33,600
Speaker 2: a part of the whole ecosystem. Um First they have

426
00:24:33,600 --> 00:24:38,580
Speaker 2: to have some digital money and I don't call it

427
00:24:38,590 --> 00:24:42,060
Speaker 2: digital currency, but digital money um

428
00:24:42,440 --> 00:24:47,090
Speaker 2: on hand and then they can then redistribute it to

429
00:24:47,090 --> 00:24:48,460
Speaker 2: their user

430
00:24:49,040 --> 00:24:52,510
Speaker 2: and the user one, they have this sort of digital

431
00:24:52,510 --> 00:24:56,530
Speaker 2: money in hand, They can send it to any other

432
00:24:56,540 --> 00:24:58,850
Speaker 2: users whose

433
00:24:59,240 --> 00:25:03,360
Speaker 2: banks or whose service provider is a member of.

434
00:25:04,640 --> 00:25:07,520
Speaker 2: Um And so you create this interoperability, I mean I

435
00:25:07,520 --> 00:25:10,160
Speaker 2: don't have a chart to show you, but

436
00:25:10,740 --> 00:25:13,250
Speaker 2: I mean I do, I can send you later and

437
00:25:13,250 --> 00:25:17,350
Speaker 2: you probably can edit the video, but um and and

438
00:25:17,350 --> 00:25:20,540
Speaker 2: and now everyone can talk to each other. We have

439
00:25:20,540 --> 00:25:26,160
Speaker 2: about 32 institutions now going live and 20 more waiting

440
00:25:26,160 --> 00:25:28,170
Speaker 2: to go live and with that

441
00:25:28,640 --> 00:25:32,200
Speaker 2: everyone can talk to each other. And it's it's become

442
00:25:32,200 --> 00:25:35,679
Speaker 2: so much easier now for people in the rural area

443
00:25:35,690 --> 00:25:39,930
Speaker 2: who open the wallet account to send money to their

444
00:25:39,930 --> 00:25:43,580
Speaker 2: Children who study in the cities, all Children who work

445
00:25:43,580 --> 00:25:46,070
Speaker 2: in the cities to send money back to their parents

446
00:25:46,070 --> 00:25:48,830
Speaker 2: in the rural area. And and that's how you bring

447
00:25:48,830 --> 00:25:53,950
Speaker 2: financial inclusion and that's how you try to reduce. I mean,

448
00:25:53,950 --> 00:25:56,189
Speaker 2: we think we try to reduce the gap between the

449
00:25:56,190 --> 00:25:57,670
Speaker 2: rule and the urban

450
00:25:57,740 --> 00:26:02,440
Speaker 2: where before that it was almost impossible for for these

451
00:26:02,440 --> 00:26:04,600
Speaker 2: two segments to talk to each other. Of course you

452
00:26:04,600 --> 00:26:09,090
Speaker 2: have a message, a taxi driver who would literally carry cash,

453
00:26:09,100 --> 00:26:13,970
Speaker 2: but now it becomes so much easier, so much more efficient, faster,

454
00:26:13,970 --> 00:26:17,430
Speaker 2: cheaper to send money to each other. And ultimately what

455
00:26:17,430 --> 00:26:19,670
Speaker 2: we want to achieve is to

456
00:26:19,840 --> 00:26:26,180
Speaker 2: allowed our migrant worker in foreign country right to be

457
00:26:26,180 --> 00:26:31,500
Speaker 2: able to send remittances home uh that easily. Um and

458
00:26:31,500 --> 00:26:36,670
Speaker 2: and that efficiently to their family back in cambodia.

459
00:26:37,640 --> 00:26:41,659
Speaker 1: It's absolutely fascinating. I remember reading a speech by a

460
00:26:41,660 --> 00:26:43,510
Speaker 1: deputy Governor of the Bank of England a couple of

461
00:26:43,510 --> 00:26:47,870
Speaker 1: years ago where his argument was, there's no need to

462
00:26:47,869 --> 00:26:49,270
Speaker 1: have in the U. K.

463
00:26:49,640 --> 00:26:53,250
Speaker 1: A. System a peer to peer clearing because the RTGS

464
00:26:53,250 --> 00:26:55,330
Speaker 1: system that the central bank offers to the rest of

465
00:26:55,330 --> 00:26:59,659
Speaker 1: the economy, both to commercial banks and then by filtering

466
00:26:59,660 --> 00:27:03,810
Speaker 1: to the rest of the economy clears transactions cheaply instantaneously

467
00:27:03,810 --> 00:27:06,270
Speaker 1: and so on. Now you preface your discussion by saying

468
00:27:06,270 --> 00:27:09,820
Speaker 1: that you do not have an RTGS in cambodia. So

469
00:27:09,820 --> 00:27:12,720
Speaker 1: do you feel that your sort of leapfrogging the conventional

470
00:27:12,720 --> 00:27:16,070
Speaker 1: central banking by embracing Blockchain or the RTgs could be

471
00:27:16,070 --> 00:27:18,770
Speaker 1: also another development that you embraced

472
00:27:19,140 --> 00:27:23,119
Speaker 2: was sort of and I think the level of development

473
00:27:23,119 --> 00:27:25,470
Speaker 2: play an important role. I think the system that we

474
00:27:25,470 --> 00:27:30,380
Speaker 2: have currently um as it is without improvement would probably

475
00:27:30,380 --> 00:27:32,780
Speaker 2: not be able to handle transactions, you know, in the

476
00:27:32,780 --> 00:27:36,200
Speaker 2: capital markets, but because we have a smaller capital market

477
00:27:36,200 --> 00:27:39,010
Speaker 2: as I mentioned to you and transaction, daily transaction is

478
00:27:39,010 --> 00:27:39,770
Speaker 2: actually very

479
00:27:39,840 --> 00:27:44,590
Speaker 2: very low. Um most of the transactions that would not

480
00:27:44,590 --> 00:27:49,600
Speaker 2: normally be quite, you know this real time settlements are

481
00:27:49,609 --> 00:27:53,560
Speaker 2: in the banking sector and so we can handle it.

482
00:27:53,570 --> 00:27:56,960
Speaker 2: But what we are we think we can do and

483
00:27:56,960 --> 00:28:00,690
Speaker 2: and and thankfully, you know we we have a um

484
00:28:00,700 --> 00:28:06,940
Speaker 2: level we're in a situation where things are going um

485
00:28:06,950 --> 00:28:10,310
Speaker 2: slowly improving slowly and so it gives us time to

486
00:28:10,310 --> 00:28:13,860
Speaker 2: also improve our system. And we hope that we can

487
00:28:13,859 --> 00:28:17,190
Speaker 2: use back on to for larger value transaction which is

488
00:28:17,190 --> 00:28:18,360
Speaker 2: you know real time

489
00:28:18,609 --> 00:28:21,210
Speaker 2: and peer to peer as well. This is something that

490
00:28:21,220 --> 00:28:22,350
Speaker 2: our team is

491
00:28:22,540 --> 00:28:25,270
Speaker 2: uh looking into. Um

492
00:28:25,740 --> 00:28:30,310
Speaker 2: but definitely definitely coming back to to your point that

493
00:28:30,320 --> 00:28:34,560
Speaker 2: for developed economy I personally

494
00:28:34,940 --> 00:28:34,970
Speaker 1: I

495
00:28:34,980 --> 00:28:38,320
Speaker 2: don't see you know what more they can do because

496
00:28:38,320 --> 00:28:41,670
Speaker 2: it is already so efficient with the way you know

497
00:28:41,680 --> 00:28:45,780
Speaker 2: people are transacting and transferring money. I don't I don't

498
00:28:45,780 --> 00:28:47,990
Speaker 2: know how this P. R. D. P. Is going to

499
00:28:48,000 --> 00:28:49,160
Speaker 2: do anything

500
00:28:49,540 --> 00:28:56,500
Speaker 2: better in terms of domestic or retail transaction. But definitely

501
00:28:56,500 --> 00:29:00,860
Speaker 2: I could see the possibility of you know, trade settlement

502
00:29:00,870 --> 00:29:06,250
Speaker 2: in central bank digital currency. Um that would play, that

503
00:29:06,250 --> 00:29:10,680
Speaker 2: would probably change the way we do trade right Because

504
00:29:10,680 --> 00:29:14,280
Speaker 2: currently for an sme to be able to trade you

505
00:29:14,280 --> 00:29:18,510
Speaker 2: you need so many things, you need so many documentation,

506
00:29:18,520 --> 00:29:19,440
Speaker 2: There are so

507
00:29:19,440 --> 00:29:20,280
Speaker 1: much

508
00:29:20,290 --> 00:29:26,100
Speaker 2: fees involved. Um And and for banks, smaller countries, the

509
00:29:26,100 --> 00:29:29,750
Speaker 2: developing countries like cambodia to find for banks, local banks

510
00:29:29,750 --> 00:29:32,460
Speaker 2: to find correspondent bank who is willing to

511
00:29:32,640 --> 00:29:36,880
Speaker 2: work with them etcetera etcetera. It's so complicated and it's

512
00:29:36,880 --> 00:29:38,080
Speaker 2: so costly

513
00:29:40,040 --> 00:29:41,870
Speaker 2: with a C B D C. You know, and and

514
00:29:41,870 --> 00:29:42,070
Speaker 2: this

515
00:29:42,070 --> 00:29:43,140
Speaker 1: is if,

516
00:29:43,150 --> 00:29:45,250
Speaker 2: you know, two countries, C B D C can talk

517
00:29:45,250 --> 00:29:49,719
Speaker 2: to each other, you know, trade settlement would be so

518
00:29:49,720 --> 00:29:50,960
Speaker 2: much simpler

519
00:29:51,340 --> 00:29:54,820
Speaker 2: um and so much simpler. Also in the sense that

520
00:29:54,820 --> 00:29:58,730
Speaker 2: if you can have, you know um one on one conversion,

521
00:29:58,730 --> 00:30:01,120
Speaker 2: let's say if I treat cambodia, trade with Singapore, I

522
00:30:01,120 --> 00:30:05,270
Speaker 2: can send my reel, alka currency is called reel right?

523
00:30:05,280 --> 00:30:07,170
Speaker 2: I can send reel and

524
00:30:07,640 --> 00:30:12,560
Speaker 2: you know, automatically, you know, the Singapore side can convert

525
00:30:12,560 --> 00:30:14,960
Speaker 2: it into sing dollars and vice versa.

526
00:30:15,340 --> 00:30:18,910
Speaker 2: Um then you would see, you know, the currency or

527
00:30:18,910 --> 00:30:23,770
Speaker 2: trade settlement would change, you would see the dynamic of

528
00:30:23,780 --> 00:30:26,760
Speaker 2: trade settlement in terms of, you know, the different fees

529
00:30:26,760 --> 00:30:29,950
Speaker 2: and structures, all the middlemen will be gone.

530
00:30:31,540 --> 00:30:35,170
Speaker 1: Absolutely. Um Sorry, one of the appeals of the original

531
00:30:35,170 --> 00:30:39,280
Speaker 1: architecture of Blockchain was the verifiability and tracked ability that

532
00:30:39,290 --> 00:30:42,360
Speaker 1: if you run a series of transactions, the leisure keeps

533
00:30:42,360 --> 00:30:44,770
Speaker 1: a record of that. So dispute resolution,

534
00:30:45,140 --> 00:30:47,760
Speaker 1: fraud detection, those sort of things become easier in such

535
00:30:47,760 --> 00:30:51,430
Speaker 1: a transparent framework. So, have you experienced that over the

536
00:30:51,430 --> 00:30:52,270
Speaker 1: last few years

537
00:30:53,340 --> 00:30:53,880
Speaker 2: in terms

538
00:30:53,890 --> 00:30:58,000
Speaker 1: of say two parties to peers, you know, have some

539
00:30:58,000 --> 00:30:59,940
Speaker 1: sort of dispute and the fact that, you know, all

540
00:30:59,940 --> 00:31:04,890
Speaker 1: the transactions are tractable through the Blockchain allows those sort

541
00:31:04,890 --> 00:31:06,560
Speaker 1: of disputes to be settled pretty easily.

542
00:31:07,140 --> 00:31:12,360
Speaker 2: We haven't experienced this, I think the the things that

543
00:31:12,360 --> 00:31:15,320
Speaker 2: we have really exploited from Blockchain is the peer to

544
00:31:15,320 --> 00:31:21,570
Speaker 2: peer side. But next month also cambodia's government is planning,

545
00:31:21,570 --> 00:31:23,550
Speaker 2: I mean they're discussing planning

546
00:31:23,640 --> 00:31:26,570
Speaker 2: to issue government bonds. They haven't issued government bonds for

547
00:31:26,570 --> 00:31:27,960
Speaker 2: a very, very long time.

548
00:31:28,240 --> 00:31:30,820
Speaker 2: Um and I think this year they plan to do

549
00:31:30,820 --> 00:31:33,810
Speaker 2: so and as the central bank, we are their agent

550
00:31:33,820 --> 00:31:36,540
Speaker 2: and what we plan to do is to issue it

551
00:31:36,540 --> 00:31:39,370
Speaker 2: on Blockchain technology and so we'll try to do this

552
00:31:39,370 --> 00:31:44,260
Speaker 2: payment versus delivery uh functionality,

553
00:31:44,640 --> 00:31:49,910
Speaker 2: include that into the, into the instrument. Um and we've

554
00:31:49,910 --> 00:31:54,270
Speaker 2: already tested it's working. Um and so when that's launched

555
00:31:54,280 --> 00:31:57,750
Speaker 2: then I can probably tell you more. Um so, but

556
00:31:57,750 --> 00:32:00,550
Speaker 2: even with that, you know, you imagine how you can

557
00:32:00,550 --> 00:32:04,900
Speaker 2: eliminate all the custodian, you know, functions or the fees

558
00:32:04,900 --> 00:32:08,000
Speaker 2: that you have to pay that there's that's the beauty

559
00:32:08,000 --> 00:32:11,180
Speaker 2: of Blockchain, right? I'm still, you know, people ask and

560
00:32:11,180 --> 00:32:13,890
Speaker 2: I am, I'm still not for crypto, you know what's

561
00:32:13,890 --> 00:32:19,110
Speaker 2: happened to the crypto currency lately. Um To me personally, it's,

562
00:32:19,120 --> 00:32:22,230
Speaker 2: there's always an infusion. At first, you know when cambodia

563
00:32:22,230 --> 00:32:23,360
Speaker 2: introduced this,

564
00:32:23,440 --> 00:32:26,050
Speaker 2: they said, well the central bank is again Cryptocurrency, but

565
00:32:26,050 --> 00:32:30,530
Speaker 2: they're doing something themselves say no, no, we're using the technology, Blockchain, Blockchain.

566
00:32:30,530 --> 00:32:33,460
Speaker 2: Cryptocurrency not the same.

567
00:32:33,840 --> 00:32:38,730
Speaker 2: And so I am always fascinated with what Blockchain as

568
00:32:38,730 --> 00:32:40,560
Speaker 2: a technology can do.

569
00:32:40,940 --> 00:32:44,510
Speaker 2: Um But I don't think, you know, Cryptocurrency is something

570
00:32:44,510 --> 00:32:45,670
Speaker 2: that would, that is

571
00:32:46,040 --> 00:32:50,490
Speaker 2: worth encouraging, at least at the state where they are

572
00:32:50,500 --> 00:32:53,920
Speaker 2: right now. Um it's it's a good sort of a

573
00:32:53,920 --> 00:32:58,150
Speaker 2: gambling instrument. I mean people are making money only because

574
00:32:58,150 --> 00:33:00,960
Speaker 2: they know when to sell the right time to sell

575
00:33:00,960 --> 00:33:03,150
Speaker 2: in the right time to buy. Not everyone has the

576
00:33:03,150 --> 00:33:06,860
Speaker 2: sophistication of understanding all this. Um,

577
00:33:07,040 --> 00:33:11,510
Speaker 2: but I I think Blockchain is so much, there's so

578
00:33:11,510 --> 00:33:14,360
Speaker 2: much to it that we can explore and I'm really

579
00:33:14,360 --> 00:33:17,890
Speaker 2: excited that, you know, at the bank, we are doing

580
00:33:17,900 --> 00:33:22,700
Speaker 2: a lot, trying to, you know, test different, you know, case,

581
00:33:22,710 --> 00:33:23,770
Speaker 1: uh,

582
00:33:24,040 --> 00:33:24,240
Speaker 1: what

583
00:33:24,240 --> 00:33:27,850
Speaker 2: we call it, use cases of Blockchain technology and hopefully

584
00:33:28,040 --> 00:33:31,960
Speaker 2: we can share that experience to others developing countries.

585
00:33:32,440 --> 00:33:32,950
Speaker 1: Um,

586
00:33:33,340 --> 00:33:36,750
Speaker 1: another aspect of Blockchain that especially the crypto world has

587
00:33:36,750 --> 00:33:40,140
Speaker 1: been appealing is the ability to be anonymous or pseudonymous

588
00:33:40,150 --> 00:33:41,050
Speaker 1: assuming

589
00:33:41,440 --> 00:33:44,990
Speaker 1: in your framework you don't allow that and all peers

590
00:33:44,990 --> 00:33:46,450
Speaker 1: have to identify themselves.

591
00:33:47,040 --> 00:33:50,270
Speaker 2: Yes. Um, so you,

592
00:33:51,140 --> 00:33:53,959
Speaker 2: I mean technology is one thing, but

593
00:33:54,740 --> 00:33:58,100
Speaker 2: how you design your policy behind it is even more

594
00:33:58,100 --> 00:33:59,360
Speaker 2: important because

595
00:33:59,740 --> 00:34:02,020
Speaker 2: technology can do a lot of things, but if you

596
00:34:02,020 --> 00:34:05,280
Speaker 2: don't know how to use it properly or design a

597
00:34:05,280 --> 00:34:09,569
Speaker 2: control sort of function measures properly, then it can be

598
00:34:09,580 --> 00:34:14,430
Speaker 2: quite risky. And so what we do with this is

599
00:34:14,430 --> 00:34:17,450
Speaker 2: that first of all, we, even though it's Blockchain, it's

600
00:34:17,450 --> 00:34:21,540
Speaker 2: a close loop Blockchain, then again, I've got technology is

601
00:34:21,540 --> 00:34:24,380
Speaker 2: coming to me, well, you then be the purpose of

602
00:34:24,390 --> 00:34:27,319
Speaker 2: using Blockchain because Blockchain need to be, you know, it's

603
00:34:27,320 --> 00:34:29,840
Speaker 2: supposed to be public and I said, I don't need

604
00:34:29,840 --> 00:34:33,009
Speaker 2: it to be public, needed to be close loop. I

605
00:34:33,010 --> 00:34:35,410
Speaker 2: needed to be fast. If it goes first of all,

606
00:34:35,420 --> 00:34:38,180
Speaker 2: it's confidentiality issues, I don't want to get it to

607
00:34:38,180 --> 00:34:41,040
Speaker 2: go public. Second of all, I needed to be fast

608
00:34:41,040 --> 00:34:42,760
Speaker 2: so I don't need it to go public.

609
00:34:43,239 --> 00:34:47,020
Speaker 2: So I said, closed loop. Suit me. Right. So you

610
00:34:47,020 --> 00:34:49,690
Speaker 2: just adjust the system to whichever way you want it

611
00:34:49,690 --> 00:34:54,480
Speaker 2: to be. Second of all, we have designed it in

612
00:34:54,480 --> 00:34:58,010
Speaker 2: such a way that whoever come into the system needs

613
00:34:58,010 --> 00:35:01,060
Speaker 2: to be identified. I mean I can choose not to

614
00:35:01,140 --> 00:35:03,170
Speaker 2: but we have designed it in such a way that

615
00:35:03,170 --> 00:35:05,070
Speaker 2: if you want to be into this

616
00:35:05,440 --> 00:35:09,210
Speaker 2: B B B a participant, you have to identify yourself.

617
00:35:09,219 --> 00:35:13,240
Speaker 2: And so we make sure that, you know, banks identify

618
00:35:13,239 --> 00:35:17,050
Speaker 2: their customers before they are allowed to use back on properly.

619
00:35:17,440 --> 00:35:20,419
Speaker 2: We can all we have also made it a way that,

620
00:35:20,430 --> 00:35:23,340
Speaker 2: you know, with the system that we we issued. It

621
00:35:23,340 --> 00:35:24,719
Speaker 2: could also be that the central

622
00:35:24,719 --> 00:35:25,169
Speaker 1: bank

623
00:35:25,540 --> 00:35:25,770
Speaker 1: can

624
00:35:25,770 --> 00:35:27,759
Speaker 2: be the one who do the K. Y. C.

625
00:35:28,340 --> 00:35:30,460
Speaker 2: But we designed it in such a way that the

626
00:35:30,460 --> 00:35:33,940
Speaker 2: central bank will not do the K. Y. C. The

627
00:35:33,940 --> 00:35:36,830
Speaker 2: banks would do the K. Y. C. Right? We wouldn't

628
00:35:36,830 --> 00:35:38,899
Speaker 2: know who is who and that to resolve the problem

629
00:35:38,900 --> 00:35:40,959
Speaker 2: of central bank knowing too much about

630
00:35:40,960 --> 00:35:41,470
Speaker 1: me,

631
00:35:42,040 --> 00:35:45,990
Speaker 2: right. We have also designed our system in such a way,

632
00:35:46,000 --> 00:35:48,640
Speaker 2: you know, when people call back on as a central

633
00:35:48,640 --> 00:35:51,960
Speaker 2: bank digital currency, we've designed it in such a way

634
00:35:51,960 --> 00:35:56,320
Speaker 2: that the liability we're not to the central bank, but

635
00:35:56,320 --> 00:35:57,160
Speaker 2: to the banks,

636
00:35:57,540 --> 00:35:58,050
Speaker 2: right?

637
00:35:58,440 --> 00:35:58,790
Speaker 1: These

638
00:35:58,790 --> 00:36:01,010
Speaker 2: are just things that you can design. You know, the

639
00:36:01,010 --> 00:36:03,190
Speaker 2: system can tell you something that you can make the

640
00:36:03,190 --> 00:36:04,550
Speaker 2: rules yourself.

641
00:36:05,430 --> 00:36:07,430
Speaker 1: Absolutely. So I want to get into that issue because

642
00:36:07,440 --> 00:36:10,350
Speaker 1: now several times you have made a distinction between what

643
00:36:10,350 --> 00:36:13,180
Speaker 1: you call digital money in versus what many others call

644
00:36:13,180 --> 00:36:15,630
Speaker 1: central bank digital currency. And I suppose it is that

645
00:36:15,630 --> 00:36:19,230
Speaker 1: liability part that you're not issuing any new currency into

646
00:36:19,230 --> 00:36:20,250
Speaker 1: that back home system.

647
00:36:20,830 --> 00:36:24,820
Speaker 2: No, it's it's banks will have to exchange their fiat

648
00:36:24,820 --> 00:36:29,739
Speaker 2: money against the digital version of it. Right? And so

649
00:36:29,739 --> 00:36:32,940
Speaker 2: one of the money is pulling its pulling right, we're

650
00:36:32,940 --> 00:36:36,660
Speaker 2: not issuing you. And also because we issue in us dollar.

651
00:36:37,030 --> 00:36:37,450
Speaker 1: Right?

652
00:36:37,930 --> 00:36:43,220
Speaker 2: So I mean cambodia can't issue us dollar obviously, but

653
00:36:43,219 --> 00:36:47,100
Speaker 2: this is just transforming and this is easier to understand.

654
00:36:47,110 --> 00:36:50,780
Speaker 2: It's just transforming your paper money into the digital form

655
00:36:50,790 --> 00:36:54,339
Speaker 2: and that's it. And one of the paper money is

656
00:36:54,530 --> 00:36:57,680
Speaker 2: taking in its taking in, we're not inter mediating those

657
00:36:57,680 --> 00:36:58,160
Speaker 2: paper

658
00:36:58,230 --> 00:37:00,540
Speaker 2: money back into the economy.

659
00:37:01,130 --> 00:37:05,839
Speaker 2: Um That's that's a very big distinctions. And the second,

660
00:37:05,850 --> 00:37:09,410
Speaker 2: I mean the main was actually the number one distinction

661
00:37:09,410 --> 00:37:12,690
Speaker 2: is the central bank liability to it. So as I

662
00:37:12,690 --> 00:37:17,200
Speaker 2: mentioned to you earlier that banks or financial institutions in

663
00:37:17,200 --> 00:37:19,180
Speaker 2: general who want to be part of it need to

664
00:37:19,180 --> 00:37:20,049
Speaker 2: exchange

665
00:37:20,330 --> 00:37:23,350
Speaker 2: their own fiat money with the central bank.

666
00:37:23,430 --> 00:37:28,260
Speaker 2: And so the liability is between the central banks and

667
00:37:28,260 --> 00:37:35,469
Speaker 2: the banks, right? And once the bank distributed to their user,

668
00:37:35,469 --> 00:37:39,989
Speaker 2: their customers, the liability now becomes, it's between the banks,

669
00:37:40,000 --> 00:37:42,840
Speaker 2: the financial institutions and their customers,

670
00:37:43,230 --> 00:37:43,390
Speaker 1: the

671
00:37:43,390 --> 00:37:46,150
Speaker 2: central bank received at the bank. We only go to

672
00:37:46,150 --> 00:37:48,050
Speaker 2: the commercial banks,

673
00:37:48,430 --> 00:37:51,660
Speaker 2: not directly to the end users,

674
00:37:52,130 --> 00:37:55,240
Speaker 2: even though the technology is such, this is the rules

675
00:37:55,239 --> 00:37:57,700
Speaker 2: that we we've decided that this is how it's going

676
00:37:57,700 --> 00:37:58,550
Speaker 2: to spell out,

677
00:37:59,030 --> 00:38:01,580
Speaker 1: right? So in my mind, I think of it as

678
00:38:01,580 --> 00:38:04,989
Speaker 1: basically back on as a digital marketplace where people are

679
00:38:05,000 --> 00:38:07,560
Speaker 1: buying tokens and using the tokens to intermediate because that's

680
00:38:07,560 --> 00:38:08,650
Speaker 1: the medium of exchange.

681
00:38:09,020 --> 00:38:13,480
Speaker 2: Yes, yes, that's that's that's the way to, you know,

682
00:38:13,480 --> 00:38:17,080
Speaker 2: explain it properly. But again, you know, people tend to

683
00:38:17,090 --> 00:38:22,100
Speaker 2: confuse and back then it was Blockchain equal to Cryptocurrency. Now,

684
00:38:22,100 --> 00:38:25,060
Speaker 2: if the central bank used Blockchain is equal to central

685
00:38:25,060 --> 00:38:26,450
Speaker 2: bank digital currency.

686
00:38:27,120 --> 00:38:30,670
Speaker 2: Um And and so we we have to make that distinction.

687
00:38:30,670 --> 00:38:33,239
Speaker 2: And but also to me personally, I think

688
00:38:34,020 --> 00:38:37,630
Speaker 2: that the categorizing, you know, central bank, it doesn't really

689
00:38:37,630 --> 00:38:41,250
Speaker 2: matter what matter, is does it serve its purpose?

690
00:38:41,719 --> 00:38:46,169
Speaker 1: You know, to me also, central bank digital currencies actually

691
00:38:46,170 --> 00:38:49,100
Speaker 1: said the wholesale level have existed from the beginning of

692
00:38:49,110 --> 00:38:52,190
Speaker 1: digital central banking. So, you know, the liabilities are not

693
00:38:52,200 --> 00:38:55,089
Speaker 1: central banks are not sending boxes full of cash to banks,

694
00:38:55,090 --> 00:38:56,680
Speaker 1: They just say let there be money and it just

695
00:38:56,680 --> 00:38:59,640
Speaker 1: shows up as the reserves of commercial banks. It's the

696
00:38:59,640 --> 00:39:00,340
Speaker 1: retail part

697
00:39:00,420 --> 00:39:02,150
Speaker 1: that seems to be the new

698
00:39:02,719 --> 00:39:05,600
Speaker 1: point of discussion for everywhere, the retail level. Canada Central

699
00:39:05,600 --> 00:39:06,040
Speaker 1: bank

700
00:39:06,420 --> 00:39:08,940
Speaker 1: have their currencies and liable to show up in the,

701
00:39:09,320 --> 00:39:10,730
Speaker 1: I

702
00:39:10,739 --> 00:39:14,520
Speaker 2: think for the for the non sort of people who

703
00:39:14,520 --> 00:39:17,110
Speaker 2: are not in this field, there's a lot of confusion

704
00:39:17,130 --> 00:39:22,250
Speaker 2: confusion between digital money, digital currency

705
00:39:22,719 --> 00:39:28,500
Speaker 2: Cryptocurrency. Um You know, there's so many terms that it

706
00:39:28,500 --> 00:39:30,530
Speaker 2: got confused and we don't know

707
00:39:30,540 --> 00:39:31,580
Speaker 1: what

708
00:39:31,580 --> 00:39:34,350
Speaker 2: to call what and I think that that that is

709
00:39:34,360 --> 00:39:34,950
Speaker 2: a

710
00:39:35,719 --> 00:39:39,250
Speaker 2: that's confusing. Um and

711
00:39:39,620 --> 00:39:43,680
Speaker 2: it can be dangerous because you sometimes you describe something

712
00:39:43,680 --> 00:39:44,910
Speaker 2: that it is not

713
00:39:44,920 --> 00:39:45,340
Speaker 1: sure.

714
00:39:45,820 --> 00:39:48,520
Speaker 1: So, but let's talk a little bit about the central

715
00:39:48,520 --> 00:39:53,030
Speaker 1: bank digital currency angle and whether their use cases for

716
00:39:53,040 --> 00:39:56,069
Speaker 1: a country like cambodia, in your view. So, you were

717
00:39:56,070 --> 00:39:58,160
Speaker 1: talking about at the very beginning of this discussion, the

718
00:39:58,160 --> 00:40:01,270
Speaker 1: challenges that you faced at the beginning of the pandemic

719
00:40:01,280 --> 00:40:04,770
Speaker 1: and the, you know, need to furnish a teams with

720
00:40:04,770 --> 00:40:05,820
Speaker 1: plenty of cash.

721
00:40:05,910 --> 00:40:06,440
Speaker 1: Um

722
00:40:06,610 --> 00:40:09,600
Speaker 1: is there? And I thought that, you know, in the

723
00:40:09,600 --> 00:40:13,330
Speaker 1: next crisis, invariably there will be one that there could

724
00:40:13,330 --> 00:40:15,430
Speaker 1: be a digital solution to a situation like that

725
00:40:17,010 --> 00:40:19,000
Speaker 2: digital solution to a crisis.

726
00:40:19,010 --> 00:40:23,879
Speaker 1: So unlike, say for example, in Singapore, everybody digitally received

727
00:40:23,880 --> 00:40:26,460
Speaker 1: money from the Governor of Singapore as soon as the

728
00:40:26,460 --> 00:40:30,030
Speaker 1: crisis started because, you know, there's a government link to

729
00:40:30,030 --> 00:40:33,870
Speaker 1: people's bank accounts and so on. So so it didn't

730
00:40:33,870 --> 00:40:36,160
Speaker 1: have to be you know central bank digital currency because

731
00:40:36,160 --> 00:40:37,529
Speaker 1: Singapore doesn't have money, it was just

732
00:40:37,610 --> 00:40:40,980
Speaker 1: digital money to your point. Um Could you see as

733
00:40:40,980 --> 00:40:41,630
Speaker 1: opposed to you know

734
00:40:42,010 --> 00:40:46,630
Speaker 1: just furnishing cash to ATMs, could there be other solutions?

735
00:40:47,110 --> 00:40:53,160
Speaker 2: Oh there's the adoption rate of digital payment actually boomed

736
00:40:53,160 --> 00:40:58,300
Speaker 2: during the pandemic. And I've mentioned to you earlier about

737
00:40:58,310 --> 00:41:02,090
Speaker 2: you know how initially we worried about cash right being

738
00:41:02,090 --> 00:41:06,129
Speaker 2: available in A. T. M. Machines etcetera.

739
00:41:06,310 --> 00:41:08,140
Speaker 2: It turns out that

740
00:41:08,210 --> 00:41:12,290
Speaker 2: you know people are so much more comfortable using their

741
00:41:12,290 --> 00:41:16,330
Speaker 2: mobile phone to pay transactions. Uh

742
00:41:16,710 --> 00:41:19,520
Speaker 2: and and and that really helped us as a central

743
00:41:19,520 --> 00:41:23,680
Speaker 2: bank as well. Um during the crisis, I mean the pandemic,

744
00:41:23,690 --> 00:41:30,860
Speaker 2: our government has of course dispersed direct uh made cash

745
00:41:30,860 --> 00:41:34,319
Speaker 2: transfer directly to vulnerable

746
00:41:34,510 --> 00:41:38,750
Speaker 2: segment of the population. And that was done through the

747
00:41:38,760 --> 00:41:46,410
Speaker 2: mobile money platform. And people are happy because it's it's fast,

748
00:41:46,420 --> 00:41:50,850
Speaker 2: it come in full right? There's no leakages along the

749
00:41:50,850 --> 00:41:54,290
Speaker 2: way which happened, you know if you were to give

750
00:41:54,290 --> 00:41:56,830
Speaker 2: cash um so

751
00:41:56,910 --> 00:42:01,250
Speaker 2: people are much happier, it's more transparent, much more efficient

752
00:42:01,260 --> 00:42:05,730
Speaker 2: and and and this is going forward. What the government

753
00:42:05,730 --> 00:42:11,120
Speaker 2: is going to adopt is that trying to do things

754
00:42:11,130 --> 00:42:15,810
Speaker 2: digitally uh more uh So

755
00:42:15,900 --> 00:42:19,040
Speaker 2: yeah I hope that it will continue and I hope

756
00:42:19,050 --> 00:42:25,000
Speaker 2: we I recently I I shared Cambodian experience too. I

757
00:42:25,000 --> 00:42:29,379
Speaker 2: was in Morocco two weeks ago at the meeting for

758
00:42:29,380 --> 00:42:32,010
Speaker 2: the governor from the french

759
00:42:32,400 --> 00:42:37,620
Speaker 2: uh speaking country. Governor from Central Bank of french speaking

760
00:42:37,620 --> 00:42:41,910
Speaker 2: country and I did it in french, very terrible one.

761
00:42:41,920 --> 00:42:47,850
Speaker 2: Um and after the presentation I've got uh Central bank

762
00:42:47,850 --> 00:42:49,920
Speaker 2: governors from Tunisia

763
00:42:50,100 --> 00:42:54,320
Speaker 2: Mozambique Mauritius and Madagascar

764
00:42:54,600 --> 00:42:57,270
Speaker 2: coming and say we want to know more. We we

765
00:42:57,270 --> 00:43:00,469
Speaker 2: did something but it wasn't like yours. But apparently there

766
00:43:00,469 --> 00:43:02,930
Speaker 2: was studying, we are

767
00:43:03,300 --> 00:43:07,360
Speaker 2: launching it for two years already and I said, look,

768
00:43:07,370 --> 00:43:10,730
Speaker 2: I'm happy to share it. May what we experience may

769
00:43:10,730 --> 00:43:17,469
Speaker 2: not be, you know, 100% applicable to your sort of situation.

770
00:43:17,469 --> 00:43:20,710
Speaker 2: But you know, if, you know, if there is any

771
00:43:20,719 --> 00:43:22,430
Speaker 2: challenges or any,

772
00:43:22,500 --> 00:43:25,120
Speaker 2: you know that we can share with you? I'm happy

773
00:43:25,120 --> 00:43:28,520
Speaker 2: to do so because going through this obviously we

774
00:43:28,700 --> 00:43:31,480
Speaker 2: uncounted a lot of obstacles and if we can share

775
00:43:31,480 --> 00:43:34,070
Speaker 2: those obstacles as well as our success to them and

776
00:43:34,070 --> 00:43:36,430
Speaker 2: they can make something out of it, we're happy to

777
00:43:37,300 --> 00:43:42,080
Speaker 1: Yeah, but what about carrying this idea to its full limit,

778
00:43:42,090 --> 00:43:43,120
Speaker 1: which is

779
00:43:43,500 --> 00:43:47,160
Speaker 1: central bank digital currency where you actually issue digital liabilities

780
00:43:47,160 --> 00:43:50,340
Speaker 1: that show up in the e wallets of Cambodian citizens,

781
00:43:50,340 --> 00:43:52,319
Speaker 1: would you ever consider going that far?

782
00:43:53,000 --> 00:43:57,930
Speaker 2: I won't exclude anything? I think because you know, at

783
00:43:57,930 --> 00:43:59,989
Speaker 2: the end of the day, you know, is there a

784
00:43:59,989 --> 00:44:02,899
Speaker 2: real use of it, is that real effect? Are we

785
00:44:02,910 --> 00:44:05,770
Speaker 2: ready for it? Right? And as I said, you know,

786
00:44:05,770 --> 00:44:11,410
Speaker 2: we we we love technology for it to solve our problem,

787
00:44:11,410 --> 00:44:15,279
Speaker 2: but we're definitely not want it to come and mess

788
00:44:15,280 --> 00:44:18,989
Speaker 2: up even us even more, you know. Um, and so

789
00:44:18,989 --> 00:44:22,430
Speaker 2: definitely when the time come and we see the need

790
00:44:22,440 --> 00:44:27,260
Speaker 2: for a, you know, a full fledged C B D C.

791
00:44:27,270 --> 00:44:29,830
Speaker 2: And then definitely that would be something that we will

792
00:44:29,840 --> 00:44:31,420
Speaker 2: we will consider.

793
00:44:31,690 --> 00:44:35,750
Speaker 2: But at this stage, I think we were happy with

794
00:44:35,750 --> 00:44:41,690
Speaker 2: whatever we have right now. And I think eventually, if,

795
00:44:41,700 --> 00:44:45,180
Speaker 2: you know, if other countries move particularly, you know, develop

796
00:44:45,180 --> 00:44:48,049
Speaker 2: one move towards C B D C and there is

797
00:44:48,050 --> 00:44:51,009
Speaker 2: interoperability between those C B D C, then this would

798
00:44:51,020 --> 00:44:52,109
Speaker 2: be something that

799
00:44:52,190 --> 00:44:55,430
Speaker 2: we, as a smaller country could benefit for trade settlement,

800
00:44:55,430 --> 00:44:57,310
Speaker 2: then definitely will go that direction.

801
00:44:57,690 --> 00:45:00,089
Speaker 1: Right? I'm really intrigued by some of the pilots that

802
00:45:00,090 --> 00:45:02,430
Speaker 1: the B I s have done with a few central

803
00:45:02,430 --> 00:45:05,750
Speaker 1: banks around the world. You made the point earlier that

804
00:45:05,750 --> 00:45:08,310
Speaker 1: as far as, you know, trade payment and settlement is concerned,

805
00:45:08,690 --> 00:45:12,120
Speaker 1: a Blockchain based business system could probably cut down on

806
00:45:12,120 --> 00:45:14,850
Speaker 1: a lot of the frictions that exist in the current system.

807
00:45:14,850 --> 00:45:18,359
Speaker 1: Similarly for just a system of trade credit itself, because

808
00:45:18,360 --> 00:45:22,120
Speaker 1: that is also subject to huge information asymmetry and cost

809
00:45:22,130 --> 00:45:26,009
Speaker 1: and cross border payments. Uh, yeah, so I'm also intrigued

810
00:45:26,010 --> 00:45:27,220
Speaker 1: and I hope that

811
00:45:27,489 --> 00:45:30,710
Speaker 1: being at the frontier of central banking, as central bank

812
00:45:30,719 --> 00:45:32,190
Speaker 1: company has been that, you know, we will sort of

813
00:45:32,190 --> 00:45:35,020
Speaker 1: look to you to introduce some of these things in

814
00:45:35,020 --> 00:45:39,460
Speaker 1: the coming years and decades. Um the issue of dollarization,

815
00:45:39,469 --> 00:45:41,910
Speaker 1: you have brought it up several times. And I'm particularly

816
00:45:41,910 --> 00:45:44,219
Speaker 1: intrigued because you know, within South Asia, we actually don't

817
00:45:44,219 --> 00:45:47,670
Speaker 1: have too many economies with that attribute of cambodia. So

818
00:45:47,670 --> 00:45:50,090
Speaker 1: in your view, I mean, how does it help or

819
00:45:50,090 --> 00:45:51,419
Speaker 1: hurt cambodia?

820
00:45:51,989 --> 00:45:54,109
Speaker 2: Oh, I mean when

821
00:45:54,790 --> 00:45:58,690
Speaker 2: For those of you know, your listeners who don't know

822
00:45:58,690 --> 00:46:04,650
Speaker 2: what Cambodia, we we've been through civil wars for 30

823
00:46:04,650 --> 00:46:10,300
Speaker 2: years and then we were under sanctions for 10 years

824
00:46:10,300 --> 00:46:11,710
Speaker 2: right after the war.

825
00:46:11,780 --> 00:46:15,370
Speaker 2: And then the country start to open up in 92,

826
00:46:15,380 --> 00:46:19,700
Speaker 2: even in 1992 was still having no civil war

827
00:46:19,880 --> 00:46:26,340
Speaker 2: Along the border. And then 1998 that we have completely

828
00:46:26,350 --> 00:46:30,670
Speaker 2: achieved full peace and very relevant today. You know, peace

829
00:46:30,670 --> 00:46:33,520
Speaker 2: is very very important, something that we tend to take

830
00:46:33,520 --> 00:46:37,470
Speaker 2: for granted. But anyway, so dollarization came about in 92

831
00:46:37,480 --> 00:46:41,330
Speaker 2: when you know, the it was a blessing at first.

832
00:46:41,330 --> 00:46:43,520
Speaker 2: You know, it's like a baby, you you know, you

833
00:46:43,530 --> 00:46:46,300
Speaker 2: you give birth and the baby needs milk.

834
00:46:46,480 --> 00:46:49,089
Speaker 2: But eventually as the baby grow up, you have to

835
00:46:49,090 --> 00:46:52,200
Speaker 2: win milk with other solid food, right? And that is

836
00:46:52,200 --> 00:46:55,590
Speaker 2: the same because when we we came out from sanctions

837
00:46:55,590 --> 00:47:02,070
Speaker 2: and wars etcetera, people were saving in um in gold. Right?

838
00:47:02,080 --> 00:47:05,920
Speaker 2: And so u s dollar was, you know, disabled currency that,

839
00:47:05,930 --> 00:47:07,500
Speaker 2: you know, everyone was looking at

840
00:47:07,880 --> 00:47:11,900
Speaker 2: two and it was much easier to use than gold,

841
00:47:11,910 --> 00:47:12,500
Speaker 2: you know.

842
00:47:13,080 --> 00:47:18,280
Speaker 2: And so it was was a very um good sort

843
00:47:18,280 --> 00:47:22,779
Speaker 2: of introduction. We we didn't intend to introduce us dollar

844
00:47:22,780 --> 00:47:27,870
Speaker 2: to the economy, but because the United Nation for transitions

845
00:47:27,880 --> 00:47:31,780
Speaker 2: came and helped us organize the first general election came in.

846
00:47:31,780 --> 00:47:32,400
Speaker 2: And

847
00:47:32,480 --> 00:47:35,900
Speaker 2: the the what we call it the the blue

848
00:47:35,980 --> 00:47:39,279
Speaker 2: casket men brought in U. S. Dollar, it was just

849
00:47:39,280 --> 00:47:43,710
Speaker 2: you know uh spreading across the countries and people adopt

850
00:47:43,710 --> 00:47:45,400
Speaker 2: that as their own currency.

851
00:47:45,780 --> 00:47:49,609
Speaker 2: And so the adopted child had now become the favorite

852
00:47:49,620 --> 00:47:54,489
Speaker 2: of the of the people. Um And and so that's

853
00:47:54,489 --> 00:47:58,540
Speaker 2: how dollarization came about. And it helps stabilize the macro

854
00:47:58,540 --> 00:48:02,890
Speaker 2: economy a lot because trust uh that there's more trust

855
00:48:02,890 --> 00:48:05,650
Speaker 2: into the U. S. Dollar than our own local currency

856
00:48:05,650 --> 00:48:09,709
Speaker 2: back then. Uh And and so it helped bring in

857
00:48:09,719 --> 00:48:14,460
Speaker 2: confidence investors and it helped to bring saving into the

858
00:48:14,460 --> 00:48:17,149
Speaker 2: system because when we allow people to save in U. S.

859
00:48:17,150 --> 00:48:20,150
Speaker 2: Dollar in the banking system, they say. But if we

860
00:48:20,150 --> 00:48:24,070
Speaker 2: wouldn't allow that kind of uh fund currency saving, they

861
00:48:24,070 --> 00:48:26,870
Speaker 2: would probably just you know, take it out of the

862
00:48:26,870 --> 00:48:29,790
Speaker 2: country or you know, do something that is unproductive.

863
00:48:30,170 --> 00:48:35,620
Speaker 2: Um But eventually now as the country grow, we realize

864
00:48:35,620 --> 00:48:39,370
Speaker 2: that it also does limit. As I mentioned earlier, the

865
00:48:39,380 --> 00:48:43,760
Speaker 2: role of the central bank to intervene in the economy.

866
00:48:43,770 --> 00:48:47,270
Speaker 2: I told you about the policy rate. It could also be,

867
00:48:47,270 --> 00:48:49,319
Speaker 2: you know, the role of central bank as lender of

868
00:48:49,320 --> 00:48:53,620
Speaker 2: last resort right? Where it is very limiting. So this

869
00:48:53,620 --> 00:48:57,810
Speaker 2: is why in our strategy it has always been not

870
00:48:57,820 --> 00:49:03,290
Speaker 2: de dollarization but encourage the use of local currency

871
00:49:03,370 --> 00:49:06,940
Speaker 2: because you say de dollarization, it it means to one,

872
00:49:06,950 --> 00:49:09,150
Speaker 2: I mean it gives to understand that you want to

873
00:49:09,150 --> 00:49:11,550
Speaker 2: take dollars out of the economy, which is not our

874
00:49:11,550 --> 00:49:14,910
Speaker 2: intention because we do see you know, the benefit of

875
00:49:14,910 --> 00:49:15,900
Speaker 2: having some

876
00:49:15,969 --> 00:49:20,100
Speaker 2: level of dollarization but we also want to encourage but

877
00:49:20,100 --> 00:49:22,680
Speaker 2: we wanted to encourage people to use more of the

878
00:49:22,680 --> 00:49:24,280
Speaker 2: local currency. So

879
00:49:25,170 --> 00:49:29,510
Speaker 2: Instead of the current state of 90 10% we wanted

880
00:49:29,510 --> 00:49:33,200
Speaker 2: to be you know, 2030% to 70%.

881
00:49:33,870 --> 00:49:36,700
Speaker 2: That's what we're trying to do and this is you know,

882
00:49:36,700 --> 00:49:41,230
Speaker 2: our strategies going forward and this is why with as

883
00:49:41,230 --> 00:49:46,660
Speaker 2: well one of the the intent behind is to encourage

884
00:49:46,660 --> 00:49:49,570
Speaker 2: the use of local currency. And people ask me about

885
00:49:49,570 --> 00:49:52,200
Speaker 2: how you also issue it in U. S. Dollar, right?

886
00:49:52,570 --> 00:49:53,700
Speaker 2: And I said because

887
00:49:54,070 --> 00:49:58,040
Speaker 2: people always think that dollars is easier because when people

888
00:49:58,040 --> 00:50:01,180
Speaker 2: have to, the interesting thing is that cambodia has a

889
00:50:01,180 --> 00:50:05,100
Speaker 2: very stable exchange rate, very strong low inflation rate. I

890
00:50:05,100 --> 00:50:06,989
Speaker 2: mean sofa for this

891
00:50:07,360 --> 00:50:11,940
Speaker 2: period and very strong, you know, economic prospect and this

892
00:50:11,940 --> 00:50:15,740
Speaker 2: is all the fundamental you need, you know a stable

893
00:50:15,739 --> 00:50:18,660
Speaker 2: economy and so you would think, you know with this

894
00:50:18,660 --> 00:50:21,219
Speaker 2: kind of indicator. People who switch back from U. S.

895
00:50:21,219 --> 00:50:24,430
Speaker 2: Dollar to local currency. But no they don't because they're

896
00:50:24,430 --> 00:50:28,060
Speaker 2: so used to us dollar. That they even lose the

897
00:50:28,060 --> 00:50:30,580
Speaker 2: notional value of our own local currency

898
00:50:30,760 --> 00:50:34,200
Speaker 2: Right? And because our local currency come with many zeros

899
00:50:34,200 --> 00:50:39,330
Speaker 2: behind right $1 is equal to 4000 real. So there's

900
00:50:39,330 --> 00:50:43,560
Speaker 2: so many zero they find it inconvenient to to use.

901
00:50:43,570 --> 00:50:46,660
Speaker 2: And so we think that if we can introduce you

902
00:50:46,660 --> 00:50:50,280
Speaker 2: know a form of local currency in the digital

903
00:50:51,060 --> 00:50:54,930
Speaker 2: uh sort of form then maybe it would make it

904
00:50:54,940 --> 00:50:59,090
Speaker 2: easier for people to transact. And in fact we saw

905
00:50:59,090 --> 00:51:05,540
Speaker 2: increased in transactions in local currency in the digital platform.

906
00:51:05,550 --> 00:51:08,879
Speaker 2: Thanks to the existence of because now

907
00:51:09,160 --> 00:51:12,770
Speaker 2: unlike the wallet where you can choose one account right

908
00:51:12,770 --> 00:51:14,779
Speaker 2: when you open the wallet account or bank account you

909
00:51:14,780 --> 00:51:17,680
Speaker 2: choose oh I. One U. S. Dollar.

910
00:51:18,460 --> 00:51:20,620
Speaker 2: But and obviously if your income is in us dollar

911
00:51:20,620 --> 00:51:23,420
Speaker 2: you open a us dollar. People would not have thought

912
00:51:23,420 --> 00:51:25,779
Speaker 2: of opening accounting in local currency

913
00:51:26,260 --> 00:51:29,830
Speaker 2: with the moment you download you are given a local

914
00:51:29,830 --> 00:51:31,090
Speaker 2: currency in it.

915
00:51:31,100 --> 00:51:31,710
Speaker 1: Like even you

916
00:51:31,710 --> 00:51:35,300
Speaker 2: don't ask for it would give you one right we

917
00:51:35,310 --> 00:51:38,509
Speaker 2: offer you one you don't have to ask. And so

918
00:51:38,510 --> 00:51:42,480
Speaker 2: when people see this as a certain you know emotional

919
00:51:42,489 --> 00:51:45,190
Speaker 2: sort of attachment to it. So they would want to

920
00:51:45,190 --> 00:51:46,940
Speaker 2: try it. They would want to test it they would

921
00:51:46,940 --> 00:51:48,279
Speaker 2: want to use it as well

922
00:51:48,460 --> 00:51:51,450
Speaker 2: that's how you know we we we want to sort

923
00:51:51,450 --> 00:51:55,830
Speaker 2: of wake up this this uh this uh this doorman

924
00:51:55,830 --> 00:51:56,770
Speaker 2: sort of

925
00:51:57,260 --> 00:52:00,770
Speaker 2: part of their not brain but probably hard you know

926
00:52:00,770 --> 00:52:05,060
Speaker 2: and see the local currency as more than just

927
00:52:05,650 --> 00:52:08,860
Speaker 2: local currency that there there is a notion of of

928
00:52:08,860 --> 00:52:11,890
Speaker 2: national identity embedded to it as well

929
00:52:11,900 --> 00:52:14,500
Speaker 1: And any progress so far. Are you seeing that 10%

930
00:52:14,500 --> 00:52:16,180
Speaker 1: becoming like 11 or 12

931
00:52:17,250 --> 00:52:22,660
Speaker 2: um In in the banking system it is very slow

932
00:52:22,660 --> 00:52:23,569
Speaker 2: improvement

933
00:52:23,950 --> 00:52:27,969
Speaker 2: in the digital payment. Um There is a significant increase

934
00:52:27,969 --> 00:52:31,430
Speaker 2: although you know in in terms of proportion people still

935
00:52:31,430 --> 00:52:36,629
Speaker 2: use U. S. Dollars to settle more. But the the

936
00:52:36,630 --> 00:52:39,069
Speaker 2: amount of local currency

937
00:52:39,150 --> 00:52:43,779
Speaker 2: used to settle has also increased significantly from almost nothing

938
00:52:43,780 --> 00:52:44,370
Speaker 2: to

939
00:52:44,550 --> 00:52:50,170
Speaker 2: to A. Level that we were quite happy with. So

940
00:52:50,170 --> 00:52:54,029
Speaker 2: if that continue to progress uh I think it's going

941
00:52:54,030 --> 00:52:57,240
Speaker 2: to be a long term kind of effort. It won't

942
00:52:57,239 --> 00:53:02,049
Speaker 2: happen overnight. Um But it's I think it's very important

943
00:53:02,050 --> 00:53:06,050
Speaker 2: to change behavior then to force to get people to

944
00:53:06,050 --> 00:53:08,560
Speaker 2: change their own behavior then to force them to do

945
00:53:08,560 --> 00:53:11,090
Speaker 2: something and it's long lasting as a measure.

946
00:53:11,100 --> 00:53:14,109
Speaker 1: Would it make sense to take two or 3 zeros

947
00:53:14,110 --> 00:53:14,969
Speaker 1: off the reel?

948
00:53:15,850 --> 00:53:20,610
Speaker 2: So the monetary reform is possible but it's going to

949
00:53:20,610 --> 00:53:24,210
Speaker 2: be very costly. I think one country has done. It

950
00:53:24,219 --> 00:53:25,770
Speaker 2: is Turkey

951
00:53:25,850 --> 00:53:29,890
Speaker 2: with the lira and I was in Turkey right at

952
00:53:29,890 --> 00:53:33,140
Speaker 2: the middle of all these reform and it can be

953
00:53:33,140 --> 00:53:37,740
Speaker 2: very confusing for tourists. It's confusing for the people you

954
00:53:37,739 --> 00:53:41,090
Speaker 2: have to change all your accounting system and and and

955
00:53:41,090 --> 00:53:45,010
Speaker 2: and and I. T. System because obviously now there's no

956
00:53:45,010 --> 00:53:47,600
Speaker 2: more three zeros. Um That

957
00:53:47,600 --> 00:53:48,520
Speaker 1: is

958
00:53:48,530 --> 00:53:53,140
Speaker 2: something that we haven't really thought of even though it

959
00:53:53,140 --> 00:53:54,730
Speaker 2: was suggested because we thought it's

960
00:53:54,730 --> 00:53:55,270
Speaker 1: not

961
00:53:55,850 --> 00:54:01,270
Speaker 2: Worth the cost. Right? If now everyone moved to digital

962
00:54:01,270 --> 00:54:03,830
Speaker 2: I can just make the 30 in the bracket up

963
00:54:03,830 --> 00:54:06,350
Speaker 2: somewhere and people will still see one digit.

964
00:54:07,239 --> 00:54:07,560
Speaker 1: Right?

965
00:54:08,239 --> 00:54:08,469
Speaker 1: Yeah.

966
00:54:08,840 --> 00:54:12,589
Speaker 1: Um Finally you know, we touched on this earlier and

967
00:54:12,590 --> 00:54:15,149
Speaker 1: I don't think you're that worried about it but because

968
00:54:15,150 --> 00:54:17,750
Speaker 1: there's so many headlines about it in the news these days,

969
00:54:17,750 --> 00:54:20,750
Speaker 1: I'd like to hear your views. So crypto is a

970
00:54:20,760 --> 00:54:24,810
Speaker 1: wild world. We've seen huge wealth accumulation in the crypto

971
00:54:24,810 --> 00:54:26,930
Speaker 1: space in the last couple of years and we're seeing

972
00:54:26,940 --> 00:54:28,360
Speaker 1: major wealth destruction

973
00:54:28,640 --> 00:54:31,620
Speaker 1: in the crypto space. And my understanding when I travel

974
00:54:31,620 --> 00:54:32,860
Speaker 1: around southeast Asia

975
00:54:33,040 --> 00:54:37,220
Speaker 1: um that there are many individuals who have gotten involved

976
00:54:37,219 --> 00:54:40,270
Speaker 1: in crypto trading and probably made a lot of money

977
00:54:40,270 --> 00:54:41,560
Speaker 1: in recent years and are losing

978
00:54:42,040 --> 00:54:45,280
Speaker 1: tremendous amount of money this year whenever an asset class

979
00:54:45,280 --> 00:54:47,610
Speaker 1: goes with that sort of volatility. There are some systemic

980
00:54:47,610 --> 00:54:51,900
Speaker 1: implications here and their leverage blowing up or banks saddled

981
00:54:51,900 --> 00:54:54,399
Speaker 1: getting saddled with bad loans and so on. Are you

982
00:54:54,400 --> 00:54:56,969
Speaker 1: worried about any systemic implications of such sort

983
00:54:57,440 --> 00:55:00,760
Speaker 2: as I mentioned earlier. We we don't allow the trading

984
00:55:00,760 --> 00:55:05,069
Speaker 2: of crypto in cambodia and we don't allow banks to

985
00:55:05,080 --> 00:55:09,970
Speaker 2: get involved in directly or indirectly with anything crypto.

986
00:55:10,540 --> 00:55:14,020
Speaker 2: Uh so in a way, I think we we sort

987
00:55:14,020 --> 00:55:19,360
Speaker 2: of create one frontline sort of front defense of defense,

988
00:55:20,140 --> 00:55:26,320
Speaker 2: but we can't guarantee that individuals don't hold it privately, right?

989
00:55:26,330 --> 00:55:29,440
Speaker 2: And people are holding privately, it's we're not going to

990
00:55:29,440 --> 00:55:33,160
Speaker 2: arrest them or cease it, but they can hold it privately.

991
00:55:33,739 --> 00:55:34,669
Speaker 2: Um,

992
00:55:36,440 --> 00:55:39,510
Speaker 2: but it has been worn. And this is a joint

993
00:55:39,510 --> 00:55:42,859
Speaker 2: statement between the Stock Exchange Commission, the

994
00:55:43,739 --> 00:55:48,540
Speaker 2: Police Department and the Central banks that, because there used

995
00:55:48,540 --> 00:55:51,230
Speaker 2: to be a lot of fraud happening, right? And then

996
00:55:51,230 --> 00:55:54,680
Speaker 2: we announced that you're not allowed to trade publicly. If

997
00:55:54,680 --> 00:55:56,500
Speaker 2: you want to hold it, you hold it at your

998
00:55:56,510 --> 00:55:59,670
Speaker 2: own risk. Banks are not allowed to

999
00:55:59,739 --> 00:56:03,819
Speaker 2: be involved. The banks can't help, you know, exchange or whatever.

1000
00:56:03,820 --> 00:56:04,930
Speaker 2: Even if the company,

1001
00:56:05,230 --> 00:56:08,730
Speaker 2: if a company they come to know about, is involved,

1002
00:56:08,730 --> 00:56:11,830
Speaker 2: come and and want to have a relationship with them.

1003
00:56:11,830 --> 00:56:16,410
Speaker 2: If they know about it, they shouldn't get involved with it. Um,

1004
00:56:16,420 --> 00:56:20,900
Speaker 2: so that was the rule. I I think for cambodia, uh,

1005
00:56:20,910 --> 00:56:25,009
Speaker 2: risks to the system will be very minimal, but I

1006
00:56:25,010 --> 00:56:29,680
Speaker 2: think definitely there will be individuals who are going to

1007
00:56:29,680 --> 00:56:31,540
Speaker 2: lose a lot of money.

1008
00:56:32,330 --> 00:56:35,089
Speaker 1: Final question, I probably should have asked you this earlier,

1009
00:56:35,090 --> 00:56:38,410
Speaker 1: but we got sidetracked with the fascinating subject of digital

1010
00:56:38,410 --> 00:56:41,400
Speaker 1: money is the issue that we touched upon at the

1011
00:56:41,400 --> 00:56:45,029
Speaker 1: very beginning when I was reading your bio is financial inclusion,

1012
00:56:45,030 --> 00:56:49,540
Speaker 1: particularly women's financial inclusion. We've talked about boxing's role, but

1013
00:56:49,550 --> 00:56:52,850
Speaker 1: in general, other initiatives that are close to your heart.

1014
00:56:53,630 --> 00:56:57,980
Speaker 2: Yes, so we we work uh we've committed to reduce

1015
00:56:57,980 --> 00:57:06,250
Speaker 2: exclusions of women uh from 24% to 12% by 2025.

1016
00:57:06,630 --> 00:57:10,820
Speaker 2: Um we've worked, you know, a lot with the Ministry

1017
00:57:10,820 --> 00:57:15,650
Speaker 2: of Women's affair, to educate women entrepreneurs about how to

1018
00:57:15,650 --> 00:57:22,650
Speaker 2: access financing, how to manage the financial, uh

1019
00:57:23,730 --> 00:57:28,440
Speaker 2: how to put up a financial statement, basically. Um but

1020
00:57:28,450 --> 00:57:33,840
Speaker 2: what is interesting something that I think number may not

1021
00:57:34,230 --> 00:57:36,470
Speaker 2: tell us everything is that in

1022
00:57:36,480 --> 00:57:37,100
Speaker 1: for

1023
00:57:37,110 --> 00:57:43,500
Speaker 2: In Cambodia, women in the microfinance sector constitute about 80%

1024
00:57:43,500 --> 00:57:46,160
Speaker 2: of the borrowers. That's a lot. Right.

1025
00:57:46,530 --> 00:57:51,350
Speaker 2: Um so women accessing, you know, small funding

1026
00:57:51,830 --> 00:57:52,100
Speaker 1: isn't

1027
00:57:52,100 --> 00:57:56,540
Speaker 2: an issues, but if you look at the banking sector,

1028
00:57:56,550 --> 00:58:00,350
Speaker 2: then the percentage of women having access to a bank

1029
00:58:00,350 --> 00:58:03,140
Speaker 2: loan becomes smaller.

1030
00:58:03,620 --> 00:58:07,880
Speaker 2: So this is something that we we try to um

1031
00:58:07,890 --> 00:58:10,280
Speaker 2: to work on and how to help women, you know,

1032
00:58:10,290 --> 00:58:13,470
Speaker 2: graduate to a bank loan rather than just staying at

1033
00:58:13,470 --> 00:58:17,090
Speaker 2: the microfinance loan. So, that's something that we try to do.

1034
00:58:17,100 --> 00:58:19,180
Speaker 2: The other thing that I mentioned to you about what

1035
00:58:19,190 --> 00:58:23,450
Speaker 2: that number may not tell you everything is that um

1036
00:58:23,620 --> 00:58:24,939
Speaker 2: even though at

1037
00:58:25,020 --> 00:58:30,950
Speaker 2: 80% of women borrowing in the microfinance sector,

1038
00:58:31,720 --> 00:58:34,330
Speaker 2: we're not even sure that the money actually

1039
00:58:35,120 --> 00:58:39,510
Speaker 2: goes to the women and that they are not actually

1040
00:58:39,510 --> 00:58:42,440
Speaker 2: just a front liner for the men behind,

1041
00:58:42,920 --> 00:58:43,750
Speaker 1: right?

1042
00:58:44,120 --> 00:58:49,150
Speaker 2: Um This is something that we need investigation because what

1043
00:58:49,150 --> 00:58:51,650
Speaker 2: we we realized is that

1044
00:58:52,120 --> 00:58:56,660
Speaker 2: when we did not, we but another company did a survey,

1045
00:58:56,660 --> 00:59:00,160
Speaker 2: but it's a much smaller sample. Um although we need

1046
00:59:00,160 --> 00:59:07,330
Speaker 2: to further investigate. Men have more tend to open saving account.

1047
00:59:08,220 --> 00:59:10,440
Speaker 2: Um more than women,

1048
00:59:10,920 --> 00:59:11,640
Speaker 2: right?

1049
00:59:12,020 --> 00:59:14,830
Speaker 2: And and so when we asked the men why they

1050
00:59:14,830 --> 00:59:18,020
Speaker 2: open say, what what is the purpose of opening their

1051
00:59:18,020 --> 00:59:22,600
Speaker 2: saving account? They said they opened saving account to repay

1052
00:59:22,600 --> 00:59:23,450
Speaker 2: their law.

1053
00:59:24,420 --> 00:59:30,030
Speaker 2: So this is counterintuitive where you see women borrow more,

1054
00:59:30,040 --> 00:59:33,680
Speaker 2: but it's actually the man who open saving account to

1055
00:59:33,680 --> 00:59:34,740
Speaker 2: repay the loan.

1056
00:59:35,720 --> 00:59:40,530
Speaker 2: Um So that's something that we probably need to investigate.

1057
00:59:40,540 --> 00:59:45,430
Speaker 2: Um But definitely I think that if women have access

1058
00:59:45,430 --> 00:59:48,740
Speaker 2: to finance and and be independent,

1059
00:59:48,820 --> 00:59:52,510
Speaker 2: the whole society will benefit. I mean there's many studies

1060
00:59:52,510 --> 00:59:55,830
Speaker 2: about how women use her finances as opposed to men.

1061
00:59:55,830 --> 00:59:58,030
Speaker 2: I mean not to discredit men, but

1062
00:59:58,120 --> 01:00:01,340
Speaker 2: women tend to spend it more on Children on a

1063
01:00:01,340 --> 01:00:05,850
Speaker 2: household education and healthcare. Um And this is very important

1064
01:00:05,850 --> 01:00:12,320
Speaker 2: for me also personally from a personal experience because I

1065
01:00:12,330 --> 01:00:15,070
Speaker 2: something that I I try to work. I my my

1066
01:00:15,070 --> 01:00:18,640
Speaker 2: youngest son who is 4.5 now, I adopted him

1067
01:00:19,310 --> 01:00:23,790
Speaker 2: from a woman who was a migrant worker and who

1068
01:00:23,790 --> 01:00:26,030
Speaker 2: was uh

1069
01:00:26,810 --> 01:00:31,110
Speaker 2: who was sending home money while he was working in

1070
01:00:31,110 --> 01:00:35,330
Speaker 2: the cities and the money was mismanaged by the family

1071
01:00:35,340 --> 01:00:38,490
Speaker 2: because you know, the father was a drug was an alcoholic,

1072
01:00:38,490 --> 01:00:41,310
Speaker 2: the brother was a drug addict. And one day when

1073
01:00:41,310 --> 01:00:42,640
Speaker 2: this woman fell,

1074
01:00:42,710 --> 01:00:45,140
Speaker 2: you know when she felt sick and she couldn't work anymore,

1075
01:00:45,140 --> 01:00:47,260
Speaker 2: she went back home and there was nothing at home,

1076
01:00:47,260 --> 01:00:47,830
Speaker 2: it was

1077
01:00:48,010 --> 01:00:50,610
Speaker 2: the house was was in shambles and there's there's nothing

1078
01:00:50,610 --> 01:00:53,140
Speaker 2: she could rely on. So all her hard work

1079
01:00:53,510 --> 01:00:58,010
Speaker 2: just gone wasted and to start getting depressed, right? So

1080
01:00:58,010 --> 01:01:02,260
Speaker 2: depressions and and all these kind of mental issues um

1081
01:01:02,270 --> 01:01:07,120
Speaker 2: was putting her in in a very miserable situation and

1082
01:01:07,120 --> 01:01:12,470
Speaker 2: then she got raped um twice. Um and and so

1083
01:01:12,480 --> 01:01:17,820
Speaker 2: um the second was the son um from whom I

1084
01:01:17,830 --> 01:01:20,670
Speaker 2: took over. But I just realized

1085
01:01:20,670 --> 01:01:21,950
Speaker 1: that

1086
01:01:21,960 --> 01:01:23,440
Speaker 2: when I,

1087
01:01:23,910 --> 01:01:27,030
Speaker 2: this woman as a migrant worker, first of all, she

1088
01:01:27,030 --> 01:01:30,730
Speaker 2: needs a much better way to remit money home and

1089
01:01:30,730 --> 01:01:33,190
Speaker 2: that's why we're working on back home is that we

1090
01:01:33,190 --> 01:01:35,920
Speaker 2: want to make sure that women in particular are able

1091
01:01:35,920 --> 01:01:39,920
Speaker 2: to send money directly to the service provider rather than

1092
01:01:39,930 --> 01:01:42,480
Speaker 2: to a member of the family who may misuse her

1093
01:01:42,480 --> 01:01:42,930
Speaker 2: money

1094
01:01:43,110 --> 01:01:46,730
Speaker 2: or hard earned money. So if she wants the house

1095
01:01:46,730 --> 01:01:50,450
Speaker 2: to be, you know, renovated, then she should be able

1096
01:01:50,450 --> 01:01:55,200
Speaker 2: to send money directly to the construction workers right immediately.

1097
01:01:55,200 --> 01:01:58,640
Speaker 2: Or she should be able to send money to the

1098
01:01:58,710 --> 01:02:03,160
Speaker 2: hospital bill or to the school, right? Rather than passing through,

1099
01:02:03,170 --> 01:02:06,820
Speaker 2: you know, different people who may miss manage her money

1100
01:02:06,830 --> 01:02:11,480
Speaker 2: and in such a way, this is this is also empowering, right?

1101
01:02:11,490 --> 01:02:13,570
Speaker 2: And then if you look at it, she was the

1102
01:02:13,570 --> 01:02:16,760
Speaker 2: only person as a woman who was feeding the whole family.

1103
01:02:16,770 --> 01:02:20,980
Speaker 2: And so if if everything is well managed, this woman

1104
01:02:20,980 --> 01:02:21,720
Speaker 2: can live,

1105
01:02:21,800 --> 01:02:25,560
Speaker 2: you know, the living standard of the family. And the

1106
01:02:25,560 --> 01:02:27,620
Speaker 2: reason why she was depressed in the first place was

1107
01:02:27,620 --> 01:02:28,310
Speaker 2: because

1108
01:02:28,400 --> 01:02:30,620
Speaker 2: her neighbors, the girl who was, you know, in the

1109
01:02:30,620 --> 01:02:33,450
Speaker 2: village left, who left the house around the same time

1110
01:02:33,450 --> 01:02:37,460
Speaker 2: as her um their family were doing fine. You know,

1111
01:02:37,460 --> 01:02:39,920
Speaker 2: they have a much better house, they have a motorcycle,

1112
01:02:39,920 --> 01:02:43,880
Speaker 2: they have a pair of, you know, cattle, you know, and,

1113
01:02:43,880 --> 01:02:46,930
Speaker 2: and this is what really made her depressed was that

1114
01:02:47,200 --> 01:02:50,380
Speaker 2: everything she's done compared to her neighbors compared to the

1115
01:02:50,380 --> 01:02:52,720
Speaker 2: other girls in the village has gone to waste.

1116
01:02:54,100 --> 01:02:57,190
Speaker 1: Sorry, there are two aspects of this conversation that we've

1117
01:02:57,190 --> 01:03:00,700
Speaker 1: had that make it a rather unique among the conversations

1118
01:03:00,700 --> 01:03:03,540
Speaker 1: I've had in creepy time. Firstly you may not have

1119
01:03:03,540 --> 01:03:07,020
Speaker 1: noticed it, but there's bird song in the background and

1120
01:03:07,020 --> 01:03:08,870
Speaker 1: I don't think I've ever done a podcast where I've

1121
01:03:08,880 --> 01:03:11,520
Speaker 1: heard the sound of bird in the background was fantastic.

1122
01:03:11,530 --> 01:03:15,180
Speaker 1: And secondly, you put a human face to the issue

1123
01:03:15,180 --> 01:03:17,610
Speaker 1: with sometimes becomes a bit esoteric when we talk about

1124
01:03:17,610 --> 01:03:21,130
Speaker 1: digital finance or technology or financial inclusion. So I really,

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01:03:21,130 --> 01:03:24,330
Speaker 1: really appreciate you putting a human face on some of these,

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01:03:24,330 --> 01:03:27,450
Speaker 1: you know, top down work. One does sarah thank you

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01:03:27,450 --> 01:03:29,320
Speaker 1: so much for your time and insights.

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Speaker 2: Thank you.

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Speaker 1: It was great to have you and thanks to our

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01:03:33,020 --> 01:03:36,710
Speaker 1: listeners to Kobe time was produced by ken Bell bridge

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01:03:36,720 --> 01:03:40,720
Speaker 1: of spies, studios, daisy Sharma and violently provided additional assistance.

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01:03:40,730 --> 01:03:44,840
Speaker 1: All 80 episodes of Kobe time are available on apple,

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01:03:44,840 --> 01:03:48,320
Speaker 1: google and Spotify and all other major podcast platforms, as

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01:03:48,320 --> 01:03:49,320
Speaker 1: well as on Youtube

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01:03:49,400 --> 01:03:52,150
Speaker 1: as for our research publications and webinars. You can find

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01:03:52,150 --> 01:03:53,040
Speaker 1: them by Googling

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01:03:53,200 --> 01:03:57,430
Speaker 1: devious Group research Library. Thank you and have a great day.