As Cambodia inches closer to establishing a blockchain-based digital currency available for public use, local users of the U.S. dollar are sharing anxiety about implications for the future value of their imported fiat.
The Kingdom of Cambodia, located in Southeast Asia, has had a rocky relationship with its currency, the riel. After the use of currency was abolished by Pol Pot’s Khmer Rouge in the 1970s, the riel was reintroduced after the government’s collapse at a pegged dollar value of four riel to $1. However, as the world economy has fluctuated wildly in the intervening decades, the current value of the riel is now roughly 4,000 to $1.
The term “roughly” is key here, since everyday transactions are carried out in imported U.S. dollars in a de facto dual currency system. The exact exchange rate varies from town to town, but the rate of $1 to 4,000 riel is generally applicable. Of course, this dual currency system puts the government in an unenviable position. And now, to try and assert some national sovereignty and self-control over the economy, the Cambodian government is planning to take drastic, blockchain-based action.