🛶 Payments in the Mekong region: Cambodia, Laos, and Myanmar

Three economies, three currencies, one shared dependence on the dollar and the baht

In this guide, the mainland Mekong means three neighboring jurisdictions, Cambodia, Laos, and Myanmar, which share a border and a river. Each has its own monetary authority and issues its own national currency: the riel, the kip, and the kyat. None of the three currencies handles payments on its own at home; in each country, a foreign currency settles part of domestic transactions. In Cambodia, that role falls to the US dollar. In Laos, the Thai baht and the dollar share it. In Myanmar, the kyat operates under a managed exchange rate regime that makes foreign currency scarce rather than absent. The three monetary authorities have responded with different arrangements, and those arrangements determine how payments are collected and made in each country.

Dollarization means using a foreign currency, here the US dollar, for functions normally performed by the national currency. In Cambodia, it shows up in banking statistics. Foreign currency deposits made up 90.7% of total deposits in 2025, and foreign currency loans 87.4% of total lending (National Bank of Cambodia, 2025 data). Yet the riel remains stable. It averaged 4,071 riels to the dollar in 2024, a change of 0.9% year over year (National Bank of Cambodia). That stability rules out distrust of the national currency as the explanation. Cambodia’s dollarization is a habit that took root with international aid in the 1990s and was then sustained by the denominations of the banknotes in circulation.

In Laos, the role of foreign currencies stems from the depreciation of the national currency. Foreign currency deposits accounted for 69% of broad money (World Bank, Lao PDR Economic Monitor, May 2025). The kip’s average official exchange rate against the dollar depreciated by 31% in 2023, and the parallel rate by 27% the same year (World Bank, Lao PDR Economic Monitor). Inflation followed the currency. It averaged 8.5% over the first 10 months of 2025, down from 24.5% a year earlier (World Bank, Lao PDR Economic Monitor, December 2025). Over those years, Lao households that held baht or dollars preserved purchasing power that holding kip did not.

In Myanmar, foreign currency is still available, but obtaining it requires authorization. The Central Bank of Myanmar publishes a reference rate of 2,100 kyats to the dollar, which serves as an accounting and administrative benchmark rather than an execution price. Licensed banks trade at the market rate on an online platform. Letter FE-1/2937 of December 5, 2023, allowed this, replacing the administered rate that had until then applied to trades on the platform (Tilleke & Gibbins). A third, parallel rate operates outside the banking system and is not officially published. The kyat therefore has three exchange rates at once. A contract must specify which of the three applies to settlement.

All three markets built their QR standard on the same model: a code displayed by the merchant, scanned by a banking app or wallet, and settled over a national switch. This technical convergence covers the format and the domestic rail, not each country’s monetary regime. Two of the three have connected to ASEAN’s web of cross-border links: Cambodia extensively, and Laos with four of its five neighbors. Myanmar remains outside it. Exchange rate regimes, FATF status, and correspondent banking relationships remain country-specific, and cross-border payments there still run into the same obstacles as a decade ago.

Cambodia: Bakong and KHQR, de-dollarization through infrastructure

Bakong is Cambodia’s retail payment system. It went live in 2020 and is operated directly by the National Bank of Cambodia on distributed ledger infrastructure. The system is dual-currency. Each account holds a riel balance and a dollar balance, and both move over the same rail under the same clearing rules. The balances remain tokenized commercial bank deposits, so counterparty risk stays with the institution that holds the account. Central bank operation does not turn these balances into central bank money. Funds a provider keeps on Bakong are therefore exposed to the failure of its bank, not of the Cambodian state.

KHQR is the QR code standard built on Bakong the same year. A merchant displays a single code at the counter, which every connected app can read, whatever the payer’s bank. Acceptance requires neither a terminal nor an acquiring agreement in the card sense. The merchant opens an account with a member institution, prints its code, and starts accepting payments. Cambodia’s acceptance chain therefore has fewer participants than the card chain, which adds the merchant’s acquirer and the international network. No international network earns a fee.

Cambodia’s de-dollarization policy targeted the denominations in circulation rather than the exchange rate. The dollar dominated small amounts because no US coins circulated in the country, so change was given in riel. The $1, $2, and $5 bills, for their part, covered low-value purchases. The central bank organized their withdrawal in 2020. Banks and microfinance institutions were to collect them between June 1 and August 31, at the central bank’s expense during that window and at their own afterward. The prime minister publicly reiterated that the bills remained usable, because the market had read the operation as a demonetization.

QR payments extended that effect. An amount paid by code is free of any denomination constraint. Paying 3,200 riels by QR requires neither exact change nor rounding, whereas the same purchase in cash called for a $1 bill and approximate change. The riel won back the spending tier where the physical dollar had been more convenient. The central bank changed neither its exchange rate nor its exchange rate regime to achieve this. What changed was the medium for small payments, which moved from cash to account-to-account transfers.

Bakong’s statistics tell two different stories depending on the unit of measure: the number of transactions or the value settled. By transaction count, the riel wins by a wide margin. By value settled, the dollar stays ahead, since KHR 285.9 trillion is worth less than $152.8 billion at the central bank’s managed rate. The shift to the riel has therefore reached everyday payments, which are small in value. Large payments, contracts, and savings have stayed in foreign currency, as the share of foreign currency deposits confirms.

Relative to its size, Cambodia has built the densest network of QR links in the region. Every link follows the same pattern. The traveler scans a host-country code with their home bank’s app. The operator in the issuing country recognizes the foreign format and routes the transaction to the link. Settlement then takes place between designated banks, in local currencies, without going through a correspondent bank outside the region. The Cambodian merchant is credited in riel or dollars, with no FX exposure. The payer bears the conversion spread applied on their side, and that spread follows no common rule from one link to the next.

The requirement to hold a Cambodian account held back inbound use of these corridors. The central bank lifted it in August 2024 by launching the Bakong Tourists app, which gives foreign visitors access to the KHQR network without a local account. Since then, the national QR code is no longer a channel reserved for residents. A Cambodian merchant can therefore accept KHQR payments from foreign visitors passing through.

Laos: LAPNet, the national QR code, and what the unstable kip means for a contract

The Lao National Payment Network (LAPNet) is the industry-owned company that operates the Lao retail payment switch. It was set up in 2019 by a group of commercial banks and the Bank of the Lao PDR. The central bank thus holds a stake in the switch it supervises, alongside the institutions connected to it, including Banque pour le Commerce Extérieur Lao (BCEL). This setup differs from Cambodia’s, where the central bank runs its own rail with no intermediary company.

LAPNet runs the national switch and the LAO QR standard, also called One QR. The network remained bank-only longer than those of its neighbors: the first nonbank wallet, MmoneyX, did not connect until July 2, 2025. The public still accesses payments through banks’ apps, with BCEL One serving as the mass-market channel. No fintech holds the position in Laos that MoMo holds in Vietnam or GCash in the Philippines.

For a Lao contract, currency risk on the kip matters more than technical integration. The average official rate against the dollar depreciated by 31% in 2023, and the parallel rate by 27% (World Bank, Lao PDR Economic Monitor). Pressure has eased since. Inflation averaged 8.5% over the first 10 months of 2025, down from 24.5% a year earlier (World Bank, Lao PDR Economic Monitor, December 2025). That easing does not guarantee future exchange rate stability, and the nature of a creditor’s exposure is unchanged. In 2023, a 60-day receivable in kip lost a double-digit share of its value before it was even collected. The exposure runs from the invoice date to settlement, and its size depends on how fast the currency depreciates over that period.

Laos’s exchange control regime rests on three successive texts: a law, an implementing decree, and a central bank regulation. The Law on Foreign Exchange Management No. 15/NA of July 7, 2022, sets the framework. The prime minister’s decree implementing it took effect on July 14, 2023. The Bank of the Lao PDR then issued a regulation on March 7, 2024, applied from May 2, 2024. Mineral exporters must repatriate up to 85% of their proceeds and convert 35% into kip within three days. Commercial banks must sell at least 30% of the foreign currency they buy from exporters to the central bank (AMRO, Annual Consultation Report on Laos, 2024).

The regime has had a measurable effect on reserves. The share of export proceeds actually repatriated rose from 55% in 2023 to more than 70% in 2024. Foreign exchange reserves grew by $200 million to reach $1.9 billion in November 2024 (AMRO, 2024). The same regime restricts the foreign currency available to a Lao counterparty. The central bank has first call on part of the dollars a company holds, and the company’s ability to pay a foreign supplier depends on an allocation from its bank. Payment terms granted to a Lao importer therefore depend on that bank’s foreign currency liquidity when the payment falls due.

• Separate the currency of account from the currency of payment. A price stated in dollars and paid in kip creates an implicit exchange rate clause; spelling it out prevents the debtor from interpreting it in its own favor.
• Name the rate, its publisher, and its date. “Today’s rate” means nothing in Laos, where the Bank of the Lao PDR’s official rate, the rate posted by a commercial bank, and the parallel rate all diverge.
• Set a review threshold. An exchange rate move beyond an agreed percentage reopens price negotiations, instead of leaving one party to absorb a double-digit swing alone.
• Decide who pays bank charges. On an international transfer, the OUR, SHA, or BEN option determines who bears the correspondent’s fees, and on modest amounts that can cost points of margin.
• Factor in your Lao counterparty’s repatriation requirement. An exporter subject to conversion cannot keep all the foreign currency it receives, which limits its ability to fund its own purchases abroad.
• Consider the baht as a regional settlement currency. The QR corridor with Thailand has been running since April 2024, and the baht is already in everyday use in the border provinces.

Myanmar: MPU and MMQR, exchange controls, and mandatory conversion

The Myanmar Payment Union (MPU) is Myanmar’s domestic card scheme and the switch that processes its transactions. It was set up on September 15, 2011, by state-owned and private banks. MPU cards have been accepted at ATMs and points of sale in the country since September 14, 2012. Two foreign networks signed on early, JCB and then UnionPay at the end of 2012, which opened member banks’ ATMs to their cardholders. Myanmar banks then issued co-badged cards, notably with JCB, UnionPay, and Mastercard.

MyanmarPay MMQR is Myanmar’s national QR standard, launched by the Central Bank of Myanmar on February 27, 2025. It includes a switch that routes the transaction from the payer’s app to the merchant’s bank, so it is more than an encoding format. A single code at the counter replaces the patchwork of proprietary codes that came before, and both banking apps and mobile wallets can read it. By the end of January 2026, 11 wallets were connected, including KBZPay, Wave Money, AYA Pay, and CB Pay. The rollout was then less than a year old, and the volumes reached over that period show how fast it went. International payment surveys rarely mention it.

Three kyat–dollar exchange rates coexist, each with a distinct use. The first is the central bank’s reference rate, set at 2,100 kyats to the dollar since August 5, 2022. It replaced an earlier level of 1,850 kyats. The second is the rate on the online trading platform, left to buyers’ and sellers’ bids and offers. Letter FE-1/2937 of December 5, 2023, established it, replacing the administered rate previously applied on the platform (Tilleke & Gibbins). The third is the parallel rate, used outside the banking system and not officially published. An invoice converted at the reference rate overstates the value actually received, because that rate puts the kyat above the level at which the currency actually trades.

The conversion requirement forces holders of foreign currency to sell a share of it for kyats, and that share has been cut in stages. Notification 12/2022 requires foreign currency holders to convert it into kyats under a procedure and deadline set by the central bank. Notification 26/2023 of December 6, 2023, cut the share to be converted from 50% to 35%, at the reference rate. Notification 2/2026, announced on January 7, 2026, and effective January 1, 2026, lowers it to 15% at the reference rate, leaving the balance at the exporter’s disposal (Tilleke & Gibbins). Across these three notifications, the share subject to conversion has fallen from 50% to 15%, but the requirement itself remains.

Access to foreign currency to pay for imports requires administrative approval. The Foreign Exchange Supervisory Committee, set up in 2022, approves the use of foreign currency for imports and outbound transfers. A Myanmar buyer paying for an order placed abroad therefore needs that approval, regardless of the balance it holds at its bank. A 30-day payment clause in dollars takes effect only if the counterparty obtains the corresponding allocation within that time. A supplier that ships before being paid bears the uncertainty of this process, with no visibility into its progress.

CBM-NET is Myanmar’s settlement backbone, operated by the Central Bank of Myanmar itself. Its published guidelines cover funds transfers, institutions’ current accounts and overdrafts, the automated clearing house, check truncation, and the central securities depository. Its go-live date appears in no available central bank document, and dates cited elsewhere cannot be verified against that source. A connection in Myanmar therefore involves two separate counterparts: the central bank for settlement and MPU for cards.

Paying a supplier: sanctions, correspondent banks, and informal channels

The European Union’s restrictive measures on Myanmar are targeted: they apply to named persons and entities. They are based on Regulation (EU) No 401/2013 of May 2, 2013, and the accompanying decision. Renewed after the 2026 annual review, they run until April 30, 2027. The list of designated individuals and entities appears in Annex IV of the regulation and grows with each new package of measures (Council of the European Union). The funds and economic resources of listed persons are frozen. Making funds or economic resources available to them, directly or indirectly, is prohibited. However, there is no general embargo on purchases from a non-designated Myanmar supplier.

Designation targets an identified person or entity; the supplier’s country of establishment is outside the scope of the prohibition. Paying a non-listed Myanmar supplier remains lawful for a European buyer. Routing the payment through a listed bank is not, because the regulation also covers making funds available indirectly. Screening must therefore cover the supplier and every institution the funds pass through before reaching it.

The second body of rules is American, and it applies even to a transaction with no US party, as soon as settlement goes through the dollar. The Burma Sanctions Regulations, codified at Title 31 of the Code of Federal Regulations, Part 525, implement Executive Order 14014. On June 21, 2023, the Office of Foreign Assets Control designated Myanma Foreign Trade Bank and Myanma Investment and Commercial Bank. These two state-owned banks handled the regime’s foreign exchange and foreign trade transactions. General License 5 authorized the wind-down of ongoing transactions until August 5, 2023. The 50% rule extends blocking to entities owned 50% or more by a blocked person.

The nostro account is where a Myanmar payment actually breaks down, after sanctions screening and the choice of currency. A nostro is an account a bank holds with a bank abroad, in that bank’s currency, and a Myanmar bank can receive a foreign currency transfer only if it has one. On June 26, 2024, the UN Special Rapporteur on the situation of human rights in Myanmar published a report on this issue. It documents how such accounts have been maintained at regional banks for the benefit of the designated state-owned banks. Myanmar’s private banks face the opposite trend, as their correspondents dwindle under de-risking. A non-designated supplier may thus find itself with no workable banking route to Europe, because no correspondent will accept flows from its bank.

The FATF listing adds a layer of bank due diligence that comes before the sanctions review. Since October 21, 2022, Myanmar has been among the high-risk jurisdictions subject to a call for action, with a request for enhanced due diligence proportionate to the risk, not countermeasures. Each bank translates that request into its own procedures. The European buyer’s bank asks for the contract, the invoice, the transport document, and the end use before executing, and it can refuse without giving a reason. Reviewing these documents takes time on top of production and shipping.

Informal channels are used to work around the lack of a direct banking route. They include invoicing from a third-party entity in Singapore or Thailand, paying an account that is not the seller’s, settling through an informal intermediary, or paying in crypto-assets. Each of these routes shifts the risk onto the paying company’s compliance team. Paying a third party that is not party to the contract is a standard red flag for the buyer’s bank. It also exposes the supplier under Myanmar’s repatriation rules, which it evades by collecting payment outside the country.

• Screen the counterparty and its bank, not just the counterparty. EU consolidated list, OFAC SDN list, beneficial owners, and rescreening at every payment date.
• Get the settlement chain in writing. Name and BIC of the supplier’s bank, correspondent used, currency, clearing country. A supplier that can’t answer is signaling a real problem.
• Choose the currency deliberately. The euro avoids the US correspondent without removing EU measures; the dollar adds a regulator to the mix.
• Assemble the documentation before ordering the transfer. Contract, invoice, transport document, description of end use. The bank will ask for it, and providing it late extends the delay accordingly.
• Write a payment failure clause. What happens if funds are blocked or returned, or if the bank refuses to execute, and who bears the costs and FX risk while the funds are tied up.
• Check export controls if the flow is outbound. Regulation (EU) No 401/2013 prohibits supplying equipment that could be used for internal repression, as well as related technical assistance and financing.
• Keep a record of the decision, not just the payment. Lists change, and a payment that is lawful in March can become unlawful in May; proof of the screening performed on the order date is what protects you.