- Laos enlists Soramitsu to conduct studies related to its digital currency.
- The central bank is aiming to expand the popularity of the currency, Kip.
Laos has decided to try its hands to start its own digital currency, and for the study and implementation, the country has enlisted Soramitsu, a Japanese financial technology company that previously helped Cambodia in achieving the same.
The Southeast Asian country announced that the Tokyo-based company would start the research under the guidance of the central bank in October.
The Bank of the Lao People’s Democratic Republic signed a written agreement saying that Soramitsu will study the creation of a Central Bank Digital Currency (CBDC) for the country.
Soramitsu might supervise the implementation
Soramitsu is a Japan-based global startup that works on the applications of Blockchain technology in the financial sector, helping various businesses and governments. It has assisted Cambodia in bringing out its own digital payment platform. The country was aiming to uplift its currency by reducing its dependence on the dollar.
The decision by the country shows its goal to broaden the scope of the Laos Kip, its currency, after seeing the dominant influence of digital Yuan, CBDC released by the Chinese government, in Laos. Laos has close economic relations with China, which contributed to the increased popularity of the Chinese Yuan in the country.
According to the official announcement, the CBDC will help them to collect and analyze different aspects of the country’s financial performance. For instance, people’s interest in digital forms of money and the analysis of money in circulation.
Soramitsu is undertaking the country’s study, evaluating the role of the central bank and the requirements of Laos for financial integration. If the government gets ready to release the CBDC, Soramitsu might be the one leading the project.
As per the data of the World Bank, China has a major trading partnership with the country after Thailand.
Along with Cambodia and Laos, Bhutan and India are also planning to roll out their CBDCs, for which they have started their study and partnerships.