Cambodia is considering the development of its own national cryptocurrency after being inspired by the launch of the Venezuelan Petro in February.
The Cambodian crypto project would be named Entapay, and is expected to be proposed at a blockchain summit of Southeast Asian nations in its capital, Phnom Penh, on Wednesday, which will be attended by the country’s deputy prime minister, Men Sam An.
A press release issued ahead of the summit described Entapay ambitiously as “the connection between integration payment of encrypted currency and the real world. It has the great potential to even replace Visa as the new mainstream payment mode.”
Plans for Venezuela’s homegrown digital currency, backed by the government’s oil and natural resources, were first announced by President Nicolas Maduro in December, as a means to supplement the country’s plummeting bolivar fuerte.
Mr Maduro’s critics believe the move is designed to bypass US sanctions intended to pressure an authoritarian regime that has overseen food shortages and hyperinflation.
Venezuela has now joined Russia, Iran and North Korea in being accused of seeking to exploit the emerging popularity of cryptocurrencies which offer a new kind of financial infrastructure outside of the control of any central authority, particularly the US.
Experts have warned that a cryptocurrency, with its anonymity, loose regulations and ability to be converted into hard currency can be used to circumvent economic sanctions, which are usually enforced through regulatory and banking disclosure rules.
Digital currency transactions are recorded on a ledger known as the blockchain, which is maintained by independent computers rather than any central banking authority. This allows for buying and selling across borders with very little oversight.
A Cambodian cryptocurrency may be an attractive option for Hun Sen, the Cambodian prime minister, who faces the threat of international sanctions over his government’s crackdown on the political opposition, media and rights activists.
The White House announced last week that it would suspend several aid and military assistance programmes to authorities that it said shared the blame for political instability.
However, digital currencies are also being viewed as a way to boost national economies. Last week the Pacific island nation of the Marshall Islands became the first country in the world to recognise a cryptocurrency as legal tender.
The newly created digital “Sovereign” will have equal status with the US dollar as a form of payment.