Local Banks Allowed To Use Yuan In Digital Settlements

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The Bank of China and the Cambodian Ministry of Tourism on Friday signed a memorandum of understanding that allows certain banks in the Kingdom to settle transactions in Chinese yuan.

15 banks in Cambodia are now allowed to settle digital transactions in yuan. Supplied

The agreement, signed on the sidelines of the second edition of the Belt and Road Initiative (BRI) Forum in Beijing, aims to increase the number of Chinese tourists to the country by facilitating payments.

On Sunday, Chea Serey, director-general of the National Bank of Cambodia, told reporters at a press conference that 15 banks have been granted permission to settle digital payments in yuan through Union Pay, WeChat Pay and Alipay.

She said 12 additional banks have expressed interested in the scheme.

Ms Serey stressed that the agreement does not run counter to efforts by the Central Bank to promote the local currency, the riel.

“The goal of the NBC and the government is to promote the use of the Cambodian riel,” she said, adding that the yuan cannot be used in physical payments.

In 2017, NBC and the People’s Bank of China officially launched the yuan-riel exchange rate at an exhibition in China’s Nanning city, in a move that showcased the importance of economic and financial ties between the two countries.

Last year, Cambodia welcomed about 6.2 million international tourist arrivals, an increase of 10.7 percent year-on-year. About two million of these visitors were Chinese, an increase of more than 70 percent compared to 2017.

By 2020, the Ministry of Tourism expects three million Chinese tourists, followed by five million by 2025 and eight million by 2030.

This article was originally published in the Khmer Times.