Cambodia Planning To Issue State-Backed Cryptocurrency
Cambodia is reportedly looking to issue its own state-backed cryptocurrency, mirroring Venezuela’s recent actions. The South American country issued its Petro token in February, although the process did not go as smoothly as planned.
The Southeast Asian country is expected to announce the new virtual currency at the ASEAN 2018 BlockChain Summit which will be held on March 7. A press release stated that the nation will be making an important announcement detailing its new payment project called Entapay.
In the release, the project is said to be derived “…from ‘quantum entanglement’, meaning that security and encryption are the priorities, and commits itself to providing the safer, faster and more convenient service for users, enriching the practicabilities of blockchain.”
The release also states that the project can potentially replace popular payment companies such as VISA.
Another reason as to why Cambodia is interested in cryptocurrencies could be the technology’s potential ability bypass any international sanctions that may be imposed on the country. The country is currently facing criticism for its undemocratic ways, such as suppressing its press and dismissing the main opposition parties of the current regime.
One of Venezuela’s main goals for issuing their cryptocurrency was to try and get around the economic sanctions that have been enforced by western powers. This statement caused a great deal of criticism, with many legal experts believing that this objective is not legally possible.
The currency’s validity is also a heavily debated subject. Ethereum founder Vitalik Buterin voiced his opinion regarding the petro in a number of Twitter posts:
“This is why the crypto community needs to move away from “yay, blockchain” and zoom in specifically on what is the trust model of each project. This one is definitely quite centralized, and dependent in multiple ways on a central party (venez gov) that seems not very trustworthy.”
“Particularly, I recall the whitepaper says it doesn’t offer oil, it offers bolivars based on the oil price. On top of risk of total default, this gives them opportunity to do a partial default by manipulating the official bolivar rate, which they have a history of doing,” said the Ethereum founder.
Legal experts also view the cryptocurrency a “forward sale of Venezuelan oil” meaning that it is still subjected to the country’s hydrocarbon laws.
Aside from Cambodia, The Marshall Islands have also announced that they are planning on launching and initial coin offering in the next months. Even though blockchain and cryptos do pose a number of benefits, some countries are seemingly using them as a way to evade certain sanctions and laws.