Cambodia Chosen By UNDP To Pilot Universal Trusted Credentials Project
Cambodia has been selected to pilot Universal Trusted Credentials (UTC), a blockchain-based platform developed by the United Nations Development Program (UNDP) and the Monetary Authority of Singapore (MAS), aimed at enhancing digital trust and financial inclusion for Micro, Small, and Medium Enterprises (MSMEs) around the world.
According to a press release issued by the UNDP, the organisation will be partnering with Dfinity Foundation, the developer of the Internet Computer Protocol (ICP) blockchain and the largest blockchain tech employer in Switzerland and the DACH Region, to implement this program in Cambodia.
The UTC pilot project is expected to eventually roll out in 10 countries.
What Is The Universal Trusted Credentials Program?
UTC was launched in November 2023 by the UNDP and the MAS, along with other international parties, to address issues faced by MSMEs, including structural gaps in accessing affordable finance, and to capitalise on new opportunities.
According to a white paper published by the UNDP, this project will work with leading central banks across Asia, Africa, and Europe, as well as banking and non-banking financial institutions, multilateral agencies, and other stakeholders, towards building a global consensus around a data-driven, digitally enabled characterisation of MSME creditworthiness and business trust.
As explained further at the Singapore Fintech Festival, the UTC concept will enable MSMEs to create digital identities and trusted credentials through a non-collateralised set of data points. Once UTCs are accepted by financial institutions, MSMEs will be able to access a wider and deeper level of financing.
Prior to the pilot program in Cambodia, the MAS and Bank of Ghana completed a proof-of-concept using the UTC in May 2024.
The UNDP’s white paper defines UTC as:
A global framework of indicators designed for enterprises, where the data points are exclusively sourced from authoritative data sources and selected based on their relevance and utility to financial institutions for evaluating an enterprise’s intent and ability to pay. The framework thereby facilitates more efficient, cost-effective, and higher levels of financing and financial services, particularly benefiting MSMEs that often face restricted access to financing or heightened collateral requirements due to lack of verified data.
Launching Universal Trusted Credentials In Cambodia
According to the UNDP press release, the UTC pilot initiative in Cambodia will leverage the DFINITY Foundation’s decentralised ICP blockchain Internet Identity (II) solution to ensure the secure storage and management of the digital credentials.
Marcos Neto, UN Assistant Secretary General and Director of UNDP’s Bureau for Policy and Program Support, said that the UNDP’s partnership with DFINITY Foundation marks a pivotal moment in the organisation’s efforts to advance digital inclusion and economic empowerment for MSMEs in Cambodia.
“By harnessing cutting-edge technology, we can create a more secure and accessible digital credentialing system that will drive sustainable development and economic growth,” added Neto.
Dominic Williams, Chief Scientist and Founder of the DFINITY Foundation, said that MSMEs represent the backbone of most economies, and the UTC initiative represents a unique opportunity to bring transparency and increase inclusion within a financial system that often fails to cater to their needs.
“By utilising the Internet Computer blockchain technology, the UTC initiative is set to benefit from over a thousand person-years of research and development and will be supported by some of the leading cryptographers and experts in the field of digital identity,” said Williams.
FinTech Development In Cambodia Utilising The Blockchain
The annual Point Zero Forum, a policy-technology dialogue convening central banks, regulators, and industry leaders, was held in Zurich, Switzerland from July 1-3, 2024. This year’s forum featured the participation of the National Bank of Cambodia (NBC) and Sathapana Bank, who were invited to speak at a roundtable on ‘Operationalising the Universal Trusted Credentials’, which DFINITY Foundation also took part in.
H.E. Sovannorak Rath, Deputy Governor of the NBC, and Jean Pierre Gagnon, Deputy Chief of Sathapana Bank, contributed to the discussion on how underserved MSMEs can be empowered with faster, wider, and more affordable financial services, including UTCs. The presence and inclusion of Cambodian banks at high-level FinTech forums signals a commitment to new forms of digital experimentation.
The NBC also successfully launched ‘Bakong’ – a blockchain-based mobile app-enabled payment system that facilitates peer-to-peer and quick response (QR) code transactions in real-time through open APIs – in 2020, which has served as a technological model for other countries, such as Laos.
Furthermore, the Securities and Exchange Regulator of Cambodia (SERC) signed an agreement with Binance to develop digital asset regulation in the country, through which the FinTech Regulatory Sandbox was established. In early 2024, RGX, the first digital asset exchange in Cambodia, was launched under this sandbox framework.