CRYPTO

Laos partners with Soramitsu in CBDC research as regulated crypto mining begins

Laos has become the latest country to begin exploring a central bank’s digital currency (CBDC), announcing upcoming research on the subject in partnership with Japanese Distributed Laser Technology (DLT) firm Soramitsu.

The project is expected to begin this month, according to an October report by Nikkei Asia, following the signing of a memorandum of understanding between the Central Bank of Laos and the Japan International Cooperation Agency to study the CBDC’s development.

The study will assess the broad transaction needs of the Laotian people, as well as the activities of banks and other financial intermediaries in the financial system.

The report said a CBDC would provide Laotian policymakers with improved economic information, and pave the way for border CBDC-based settlements with its neighbor and second-largest trading partner China.

Soramitsu works with Cambodia on its Bakong digital payment system, a DLT-based payment network designed to reduce the country’s dependence on the US dollar for domestic trade.

The Bakong app has been downloaded nearly 200,000 times since its launch in October 2020 and is currently supported by about 2,000 stores.

The Laos government’s move to conduct research on a CBDC appears to have come under pressure to explore more authorized digital asset controls.

On September 11, the administration formally approved a public-private pilot to explore cryptocurrency mining and trading to capitalize on China’s latest crackdown on mining and the consequent emigration of industrial-scale miners.

As part of the project, six companies, including banks and construction companies, have been allowed to mine crypto assets.

Related: Crypto Transactions in Asia Grow 706% as Institutional Acceptance Increases – Chainalysis

A number of government ministries, led by the Ministry of Technology and Communications, jointly with the Bank of Laos and the National Power Utility Electricity du Laos, have also begun work on drafting regulations regulating the use of digital resources in Laos.

However, the country’s central bank has issued a notice warning the public against risks related to unregulated crypto assets, including Bitcoin and Etherium.