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The National Bank of Cambodia, the country’s central bank, has announced it is to push forward with a blockchain payments pilot, designed to make interbank payments and settlement more efficient.

The plans, originally announced back in April, will see the central bank working with Soramitsu, a Japanese blockchain startup, to develop the platform, with a view to ultimately implementing the solution on the central bank side.

While the bank has been quick to hush reports it is investigating launching its own cryptocurrency, it has confirmed that the project will be used to facilitate interbank transfers.

Blockchain solutions in banking and finance are thought to be among the most significant, in terms of efficiency and cost savings — both for public- and private-sector interests.

By developing the system for interbank payments, the National Bank of Cambodia is hoping to reduce the costs of transactions and compliance as it relates to private banks, helping boost the efficiency of the wider banking sector.

Speaking on the proposals, the director general of the National Bank of Cambodia, Chea Serey, said that work will now commence to develop a system functionality, with an end goal of giving more flexibility in monetary policy.

“At this stage we will focus on the operational functionality of the system, but we believe the system can further be customized with application development to benefit the bank’s monetary policy, including the use of the local currency.”

According to local reports, the central bank will develop the technology on Hyperledger’s Iroha protocol, one of several platforms developed under the auspices of the Hyperledger consortium, a group of companies collaborating around a Linux-led project to develop infrastructure for blockchain technologies.

It follows similar moves from central banks around the world, as they increasingly investigate the potential efficiency and process gains locked up in blockchain technology.

By using distributed ledgers to record transactions of value, the blockchain is thought to be one of the most exciting technologies of the coming decades, particularly for financial services and government administration.

The Cambodian project will be keenly watched by developers and central banks worldwide, with many developing their own similar systems to cater to a range of functions and uses.