The Central Bank of Laos is testing the possibilities of the state digital currency

Technology company Soramitsu has entered into an agreement with the payments department of the Central Bank of Laos to assist in a demonstration experiment to test the concept of CBDC.

From February 7, representatives of the Central Bank of Laos, the Embassy of Japan in Laos and the Japan International Cooperation Agency (JICA) will participate in a long-term experiment to test the use of central bank digital currency (CBDC) in the sale of goods and services. The experiment will take place in stores in Vientiane, the capital of Laos, with the technological assistance of Soramitsu.

The project called DLAK (Digital Lao Kip) is based on the Bakong system, which has been successfully operating in Cambodia since October 2020. The experiment will last until February 7, 2024. As part of the project, Soramitsu will prepare a feasibility study for the future blockchain-based payment infrastructure, and the Central Bank of Laos will make the final decision on the feasibility of launching a CBDC.

Officials expect that the state cryptocurrency, by reducing transaction costs and expanding access to digital money for the entire population of the country, will help the development of small and medium-sized businesses.

Recently, Cecilia Skingsley, head of the Bank for International Settlements (BIS) Innovation Center, said that politics could interfere with the use of central bank digital currencies at the international level.