Road Town, BVI, 16th February, 2023, Chainwire
LBank’s CMO has commented on Laos’ efforts to introduce a central bank digital currency (CBDC). According to Kaia Wang, the pilot project is a net positive that could engender tangible benefits for citizens of the Lao People’s Democratic Republic in Southeast Asia.
The Bank of the Lao People’s Democratic Republic Payment Systems Department has signed a memorandum of understanding with Tokyo-based blockchain developer Soramitsu to create a proof of concept for a CBDC. The partnership was announced on February 7 and based on the results, the Lao PDR will research further toward an official CBDC.
“Everyone should have access to convenient financial services. No one should be excluded, even if they do not have a bank account,” LBank CMO Kaia Wang shared. “Easy and fast payment systems are integral to the functioning of modern society. Whether it’s buying a cup of coffee or sending money to loved ones abroad, it should never be a struggle.”
The DLak, a digital form of the Lao kip, is distributed to consumers via commercial banks and could be converted to fiat instantly, allowing payments to be made in real-time. According to an explanatory video by Soramitsu, payments made with digital money prior to the new system typically took one month to get through, as funds would be transferred through multiple banks.
With the DLak, consumers can scan a QR code and make payments regardless of whether they have a bank account. The World Bank estimated in 2021 that only 37% of over 15s have a bank account in Lao. Financial inclusivity for people without bank accounts is listed as one of the DLak’s objectives. Additionally, simplifying remittances and reducing remittance costs are among its core goals.
The DLak project is based on a previous collaboration between Soramitsu and Cambodia. The Cambodian Bakong system was launched in October 2020 and is not a CBDC. According to an article by Nikkei Asia, Laos will also explore digital cross-border transactions with Cambodia. Another aim of the DLak is to “ensure economic security through a local currency that does not depend on other countries.”
Other countries in the region, including Vietnam and the Philippines, are also looking into CBDCs, while countries such as Fiji have shown interest in the concept.
“It’s great to see more and more countries showing an interest in blockchain technology and tapping into its potential to make people’s lives easier,” Wang added. “We are seeing more and more mainstream use of blockchain technology, and we can’t wait to see further initiatives.”
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