Singapore

Upside outweighs risks in move to a cashless society, expert says

Michael Firn / Khmer Times Share:
Covid lockdowns have accelerated the move towards using food delivery apps such as Nham24. Supplied

The problem with technological innovation is that it tends to expand in directions and at a pace that even the most tech savvy would be pushed to predict. Few would have guessed that Vietnam and The Philippines would be home to the world’s second- and third-most active cryptocurrency investors, or that Cambodian tech companies would find themselves in a market where mobile phones outnumber the population.

This leaves governments and regulators with a headache. That being the promotion of the digital economy while ensuring products are reputable and their users are protected.

Two events this week illustrate that challenge. On Friday, Thai authorities moved against cryptocurrency trading platform Binance, joining regulators in Japan and the UK in trying to protect customers from getting burned by a volatile investment vehicle. Thailand’s Securities and Exchange Commission filed a criminal complaint against Binance, saying the exchange had been operating “in the category of a digital asset exchange” without a licence, Reuters reported.

Also, on Friday hackers struck the US again. Russian-speaking ransomware syndicate REvil is believed to be behind the attack, which paralysed the networks of at least 200 US companies.

Cambodia’s government and central bank, in working with commercial banks and the fintech sector  to push a cashless society, face similar challenges as to how to ensure that people are protected.

“Nowadays technology solution providers are usually from the private sector and those solutions are provided to the public sector in their own states and outside the sovereign nation,” said Chhem Siriwat, director of the Centre for Inclusive Digital Economy at the Asian Vision Institute (AVI).

“The downside is the security aspect. How safe is Cambodia? No state, no organisation, no individual is safe. Singapore, which is the most technologically advanced country, is also the most hacked. It has the most incidences of cyber threats. It’s an uneasy feeling to have. The more I learn, the more afraid I become. The other perspective is there is no point in which we will be completely safe, but we do have a role to play in terms of thinking about security and seeing cybersecurity not as a cost but as a crucial investment. Instead of lots of guards or a big fence we have to do that security in cyberspace,” he said.

Siriwat has experience both on the academic and the commercial side.

He works with researchers at AVI to publish papers on areas such as the geopolitics of 5G and cybersecurity. He also works for PPCBank, where he says he hopes to get an insight into how the finance industry is addressing the challenges of the digital economy.

He says that regulators play an important role in overseeing the rollout of new fintech apps and platforms and he doesn’t believe that over-regulation will kill off innovation.

“Regulators have always tried to do their job in regulating something that is new. A central bank digital currency is a way we can spend money in a local context, but cryptocurrency is used in a global context. Overall, there is no crushing of innovation. If you look around the world at the regulators, it’s like a ping-pong match. It’s not crushing innovation, it’s boosting innovation, because [when] the more opposing views go towards the discussion, what comes out is more robust. The job of regulators is to decide what is appropriate in the local context,” added Siriwat.

He notes that Cambodia has huge potential to jump from an economy 2.0, powered by electricity, to an economy 4.0 or 5.0, driven by new technology. He says the Kingdom benefits from a young population, good education and a willingness to teach subjects relevant to a digital economy. He says the Coronavirus pandemic has accelerated the country’s digital development as lockdowns pushed people towards online shopping and food delivery apps such as Nham24 and FoodPanda.

 

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