Laos became the newest nation to begin exploring a central bank digital currency and announced upcoming research on the subject in partnership with Japanese distributed ledger technology firm Soramitsu.
The project is expected to begin this month and follows the signing of a MOU between Laos’ central bank and the Japan International Cooperation Agency to study the development of CBDC. The study will evaluate the operations of banks and other financial intermediaries within the financial system.
CBDC would offer policymakers better economic data, and could pave the way for cross-border CBDC-based settlements with its neighbor and second-largest trading partner, China.
Soramitsu worked with Cambodia to develop its Bakong digital payment system, a DLT-based payments network that was designed to reduce the country’s reliance on U.S. dollars for domestic trade. The Bakong app has been downloaded roughly 200,000 times since its launch in October 2020 and is currently supported by approximately 2,000 stores.
The Laos government’s move to research a CBDC appears to have come amid a push to explore more permissive digital asset regulation. Several government ministries led by the Ministry of Technology and Communications in partnership with the Bank of Laos and national power utility Electricite du Laos have also begun working toward drafting regulations governing the use of digital assets in Laos.
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