A Memorandum of Understanding has been signed between the Bank of the Lao People’s Democratic Republic (PDR) Payment Systems Department and the Japanese firm Soramitsu to launch a central bank digital currency (CBDC) of Laos, called the DLak. The two parties had collaborated earlier to launch the proof-of-concept of the CBDC on February 6.
Soramitsu published a press release where it was mentioned that the firm developed the system for the CBDC’s proof-of-concept, which the Bank of Lao PDR will carry out. The bank would also continue to research the project based on the proof-of-concept results. Soramitsu revealed they had been working on the project started by the Japan International Cooperation Agency (JICA) since December 2021.
“Bank of the Lao PDR will generate CBDC, then issue it to a temporary commercial bank. The temporary commercial bank will then send CBDC to an individual, allowing said individual to pay at the store. Then, the store sends CBDC to a commercial bank. Finally, the Bank of the Lao PDR will collect CBDC from the commercial bank,” said Soramitsu, describing the working of the DLak.
The project is based on the Cambodian Bakong system, which was also launched in collaboration with Soramitsu. Though it wasn’t described as a CBDC project, it gained immense popularity. Soramitsu also claimed it was researching CBDCs in other countries.