Crypto Adoption Around the World: Cambodia

The Current Status of Crypto Adoption in Cambodia 

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Cambodia has emerged as one of the countries interested in advanced financial transformation. Its growth in the cryptocurrency market is nothing less than impressive on the global stage.

By the end of 2026, the crypto market is expected to generate $24.1 million for Cambodia, hence showing that the demand for digital currencies is growing very fast. However, its stance on cryptocurrency has become somewhat conservative. 

While the global crypto market surges with increased user adoption and revenue projections reaching into the billions, Cambodia remains one of the countries of interest, despite its limited regulations. 

In 2019, the National Bank of Cambodia moved against cryptocurrency, issuing a directive to ban all forms of crypto transactions within the nation’s borders. This ban was directed at financial institutions, effectively shutting down any official avenues for trading in cryptocurrencies. Although this regulation bars institutional investment, it does not cover individual investors.

Cambodians eager to try out cryptocurrency can go ahead, but without the protection of any regulated financial institutions.

This cautious attitude of Cambodia towards cryptocurrency, however, is not all that tells the story. In recent years, there have been signals that the government might be softening towards an alternative approach to digital currencies. Recently, NBC developed and released Project Bakong, a Central Bank digital currency. 

Cambodia’s CBDC will likely disrupt the domestic and international payment systems in the country by providing a digital alternative for traditional fiat money with all the same controls but without the risk of decentralized cryptocurrencies. 

Crypto Law in Cambodia

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The legal environment in Cambodia concerning cryptocurrencies is characterized as hesitant and uncertain, as virtual currencies have not been clearly defined or regulated under Cambodian law. Generally speaking, the regulation of digital transactions falls under Prakas No. B14-107-161, which regulates the activities of operators involved in offering payment-related services. 

This regulation was issued by the National Bank of Cambodia and represents the guidelines for the licensing, supervision, and management of Payment Service Providers (PSPs) to ensure transparency, security, and stability within the financial system. Nevertheless, it does not exactly address issues related to cryptocurrencies, hence leaving crypto service providers in a legal gray area.

In 2018, the National Bank of Cambodia (NBC), the Securities and Exchange Commission of Cambodia (SECC), and the General Commissariat of the National Police issued a joint statement saying that propagation, circulation, buying, selling, trading, and settlement of any form of virtual currency without a license are illegal. 

The restrictions cover not only well-known cryptocurrencies such as Bitcoin but also digital tokens that are at an emerging stage, such as KH Coin and OneCoin. They highlighted several risks, such as a lack of collateral and price volatility. And the possibility of money laundering or terrorism financing.

Cambodia has expressed interest in blockchain technology despite these tight restrictions on cryptocurrency trading and transactions. In 2017, NBC partnered with a Japanese company to develop a blockchain-based tracking system for interbank transactions. 

This gave rise to Project Bakong, a Central Bank Digital Currency (CBDC) geared toward upgrading the nation’s payment system. However, Project Bakong works with conventional financial institutions and does not extend its support for mainstream cryptocurrency use. 

This statement comes out from a report by Khmer Times, indicating that in the future, such regulations might be laid down that would allow banks to process a class of stablecoins like USDT and USDC. 

NBC, on the other hand, reported that this class of cryptocurrencies did not fit the requirements set by the Central Bank, and for that reason, financial institutions were barred from dealing with them.

Taxation of Cryptocurrency in Cambodia

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Cryptocurrency taxation in Cambodia can be quite confusing, largely due to the lack of clear regulations. While the Cambodian Government does not recognize any form of cryptocurrency as legal tender, using digital currencies for various kinds of transactions can be, in one way or another, taxable by existing laws.

Thus, in case any person or business indulges in trading or investing in cryptocurrencies, such a person may need to pay income tax.

Similarly, there is no specification on capital gains on cryptocurrency in Cambodia. However, with the broad applications of the income tax laws, capital gains derived from the sale or exchange of cryptocurrencies may also be taxed.

Factors Driving Crypto Adoption in Cambodia

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Statistics predict that crypto user penetration in Cambodia, which is currently at 7.72% in 2025 and is anticipated to rise to 10.89% by 2026. Similarly, a scientific study on Cambodians’ interaction with crypto platform adoption and usage revealed that habit was the best indicator of users’ intention to use cryptocurrency platforms for trading and investing.

Performance expectations, trust, and those listed below are other noteworthy factors that contribute to the growth in cryptocurrency adoption in Cambodia.

Investment Diversification 

Cambodians view cryptocurrency as an investment alternative that will help boost their open market and ever-growing industrial sector in Cambodia. Undoubtedly, crypto will help raise accessibility for foreign investors, facilitate cross-border payments with ease, and therefore reduce transaction costs to a great extent.

Tech-Savvy Population 

The population of Cambodia is young and technology-friendly; hence, they are more likely to adopt cryptocurrency along with other user-friendly digital tools.

Present State of the Traditional Banking Facilities 

While the banking system has been computerized, people in rural areas and some parts of the country are still partially or remain unbanked. Cryptocurrency acts as an alternative financial service provider by offering financial inclusion to those deprived of traditional banking.

Market Potential

The relatively low banking penetration in Cambodia provides an avenue for the inclusion of cryptocurrency as an alternative financial system, especially for the unbanked population. Thus, user penetration is easy, and this is all thanks to its high population and internet access. 

Growing Interest in Decentralized Finance (DeFi)

The perceived attraction of DeFi in Cambodia is due to the underdeveloped financial system and the preference for alternative financial services that offer more control and transparency to the users. Since trust in traditional financial institutions is relatively low, DeFi can potentially facilitate peer-to-peer lending, borrowing, and savings without any intermediaries.

High Reliance on Cross-Border Remittance

Remittances have become an essential aspect of the country’s economy due to earnings from foreign migrant workers. In addition, a larger portion of their earnings is sent to the family members back at home. Traditional financial solutions incur high transaction fees and are more time-consuming. Crypto presents a better chance of faster, cheaper, and more secure cross-border remittances.

Challenges Facing Crypto Adoption in Cambodia 

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While Cambodia is open to exploring how regulatory regimes might unleash the potential of crypto assets, it is clear that its stance in forbidding crypto exposure is firm due to the following reasons: 

Strict Regulatory Environment

The Cambodian government has adopted a strict regulatory stance concerning the use of cryptocurrencies, and this has made the prospects for crypto adoption slim. Moreover, the government has also provided an alternative financial system, like Project Bakong, that makes use of blockchain technology. 

The presence of a competing, government-approved alternative can slow down crypto adoption if the Cambodians adopt it at a fast rate.

Infrastructure Deficiencies

Cambodia’s digital infrastructure is still in its infancy and can be an obstacle to the success of cryptocurrencies. This is because it is still relatively low in the many rural areas where most people live, despite growing internet access. With poor access to reliable internet services, a considerable number of Cambodians are not capable of using crypto platforms effectively.

High Implementation Cost

Another key limiting factor to cryptocurrency adoption in Cambodia is the high implementation costs for both individuals and businesses. This is because companies would need to invest in new technologies and security protocols, and train employees, and this can be extremely costly for SMEs.

Possible Chance of Fraud and Terrorism Funding 

Cryptocurrencies are pseudonymous by nature. Because of this, it has raised concerns worldwide over the possibility of its use for foul activities like fraud, money laundering, and terrorism financing. Regulators in Cambodia cited these concerns as one of the reasons for their strict crypto regulation. 

Potential Benefits of Crypto Adoption in Cambodia

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The number of users in the cryptocurrency market in Cambodia is expected to reach 1.97 million users by the end of 2026 as the global market continues to develop. Despite the presence of Bakong as a competing product, some Cambodians believe cryptocurrency adoption offers immense benefits:

Decentralization and financial autonomy

Project Bakong, which is Cambodia’s blockchain-based central bank digital currency, is a centralized system controlled by NBC. On the other hand, cryptocurrency works on decentralized networks where coins like Bitcoin, Ethereum, and others operate. 

Cryptocurrency decentralization opens a whole new level in financial matters, where full control over one’s assets is possible without the authority of any government or bank.  

Reduced Transaction Costs for Cross-Border Payments

Bakong’s design is primarily for domestic transactions and settlements, while cryptocurrencies facilitate both domestic and international transfers at much cheaper costs.

This is because the traditional cross-border remittance in Cambodia has, for a long time, been associated with exorbitant fees. This has caused a lot of inconvenience for the large number of Cambodian migrant workers.

Improved accessibility and Financial Inclusion

With cryptocurrencies, financial inclusion could be better than what Bakong offers because anyone with access to the Internet would be able to utilize crypto’s digital tools, regardless of how far away they are from any banking institution. This opens opportunities for Cambodians in rural or underserved areas who do not have good access to traditional banking or Bakong.

Integration with Global Finance

The major difference between cryptocurrencies and Bakong is that the former is globally recognized and accepted, while the latter is a national digital currency. Further, this positioning within global finance makes it easier for Cambodians to involve themselves in global markets because trading in, doing business with, or investing in global crypto assets is much easier. 

Privacy and Security

Cryptocurrencies are far more private than Bakong because the latter relies on a centralized ledger that is kept by the National Bank of Cambodia. Users are concerned about the privacy of their data and the access of government to their financial activities. However, cryptocurrencies provide an alternative where transactions can be conducted in a much more anonymous manner.

Conclusion

While Cambodia’s crypto policy is being restrained, for now, the times of global digital currency adoption are fast rising. Which brings up the question: How will Cambodia balance its desire to promote innovation against its need to regulate? 

With increasing pressure from the global community to get on board with digital currencies and a population that is also increasingly digitally savvy, Cambodia must take the right step, as its conservative approach could limit the country’s ability to participate in the rapidly growing global crypto market.