Cambodia Launches First Blockchain Backed Digital Assets Exchange
Cambodia has recently inaugurated the Royal Group Exchange (RGX), the nation's maiden digital assets exchange. Powered by blockchain technology, this trading platform marks a historic milestone, despite the country's laws regarding cryptocurrency transaction remaining vague as of 2024.
As clarified to B2B Cambodia on January 10, 2024, RGX, with its license and approval by the Security Exchange Regulator of Cambodia (SERC), will operate under SERC's FinTech Sandbox Regulatory Environment. It will not be directly linked to the banking sector and, in any form, will not be under the governance of the NBC.
RGX is fully owned by the Royal Group and aims to provide opportunities for individuals and businesses in Cambodia to participate in the global digital economy. The launch event was held on January 8, 2024, at the Cambodiana Hotel, and was attended by H.E Sou Socheat, Director General of the Securities and Exchange Regulator of Cambodia (SERC), and Neak Oknha Kith Meng, Chairman and CEO of the Royal Group.
At the launch event, Sou Socheat emphasised that the RGX Trading Platform operates within the FinTech Regulatory Sandbox, signifying progress in Cambodia's financial technology sector.
Socheat stated, "This launch also underscores SERC's efforts in promoting financial innovation, market integrity, and investor protection, alongside private sector involvement, meeting the needs of digital investors interested in Blockchain technology." RGX offers over 100 digital assets, including popular cryptocurrencies like Bitcoin and Ethereum, for spot and futures trading.
User funds are protected through Binance Secure Asset Fund for Users (SAFU) security measures, with technology provided by X-Codes Solutions and user data securely stored on Cambodian servers by local telco Ezecom. Kith Meng, sharing his vision for the platform, said: "RGX aims to be a catalyst for change, promoting financial inclusion and empowering our community members to access opportunities in the digital economy."
RGX’s Future Plans and Innovations - Cambodia Digital Assets Exchange
During the launch event, Thomas Schings, Senior Manager of the Royal Group, outlined the exchange's future plans. He announced the introduction of the RGX Token and plans to enable asset tokenisation, including real estate trading on blockchain-based securities platforms.
He added that to ensure compliance with international Anti-Money Laundering (AML) regulations, RGX has partnered with Chainanalysis, a transaction monitoring and KYC processes provider.
For customer support, RGX has enlisted Zendesk, a support services provider. Schings emphasised the user-friendly nature of the platform, highlighting that users can complete registration and KYC (Know Your Customer) in just two days through online registration at www.rgxtrade.com.
B2B Cambodia navigated around the website and some sections still had dummy ‘placeholder’ text such as the FAQ, as of January 10, 2023. The website is available in two languages currently - English and Khmer.
Cambodia’s Cryptocurrency - Navigating Regulatory Uncertainties
Despite Cambodia's 2017 ban on cryptocurrency transactions, a 2022 survey by Standard Insight indicated growing interest among Cambodians. While many remain unfamiliar, over 10 per cent reported using cryptocurrencies. Cambodia also has a robust fintech sector, with the central bank's blockchain-based Bakong payment system reaching nearly half the population.
Despite the lack of specific regulations in 2022, Cambodia took a step towards exploring cryptocurrency regulation and digital assets training by signing a Memorandum of Understanding with Binance. Statista forecasts a significant growth rate of 16.01 per cent in Cambodia's cryptocurrency market from 2024 to 2027.
In a response to B2B Cambodia, RGX expressed its future plans to expand its services and work towards integrating fiat currency, which is government-issued money not backed by physical commodities like gold and silver, with banks. This integration aims to meet user demands and enhance convenience. “For now, RGX is a new platform to the market, and we do realise our responsibility in educating users about the benefits as well as the risks of digital asset trading and investing. We are excited to see the market develop, and as such, RGX will also develop over time while working in close communication with the relevant government bodies,” RGX told B2B.
Global Cryptocurrency Market Outlook In 2024
In the broader cryptocurrency landscape in 2024, Bitcoin is expected to perform well by the bulls (investors optimistic about the space), building on its momentum from the backend of 2023. Some analysts suggest that Bitcoin may reach a new all-time high in 2024, driven by factors such as the anticipated approval of a spot Bitcoin exchange-traded fund (ETF) in the United States, and increasing interest in novel use cases like Ordinals, a Bitcoin-based equivalent of non-fungible tokens (NFTs).
CNBC reported that Bitcoin had a huge rally in 2023, with the digital currency up some 152 per last year and some expect the rise of the cryptocurrency to continue. After a challenging year in 2022, marked by project collapses, high-profile bankruptcies, and legal issues, the cryptocurrency industry is looking to move forward.
The bankruptcy of FTX, as well as the legal troubles faced by Binance's Changpeng Zhao who stepped down as CEO and is still awaiting sentencing in the US, prompted the industry industry to seek regulatory clarity and compliance. For those who believe a new bull is imminent, it is based on two key factors;
- First, the bitcoin "halving," which occurs every four years, reduces the rewards for miners and limits the supply of bitcoin. This event has historically preceded an increase in the price of bitcoin;
- Secondly, as of January 10, 2024, the U.S. Securities and Exchange Commission (SEC) approved 11 Exchange-Traded Funds (ETFs) for Bitcoin in the US. This development opens up opportunities for numerous new investors to explore the world of cryptocurrencies and allows investors to access Bitcoin's price without directly holding the digital currency. This would potentially help attract a wider range of investors, including institutional ones.
Analysts from Standard Chartered, as reported by Reuters, say the ETFs have the potential to attract USD $50 billion to USD $100 billion in 2024 alone. However, other analysts anticipate inflows of around USD $55 billion over five years.
The market capitalisation of Bitcoin in early 2024 exceeds USD $913 billion. Additionally, the total net assets of U.S. ETFs, as of December 2022, were recorded at USD $6.5 trillion. This optimism has led to some bold predictions about Bitcoin's potential price, which is synonymous with the volatility of cryptos.