Chinese Researchers Propose Asian Digital Currency to Reduce Dependence on US Dollar
An expert from China’s Economic Research Institute popularized the idea of creating a blockchain-powered digital currency that could reduce Asia’s dependence on the US dollar. The initiative follows the expansion of a digital renminbi pilot, after recent trials of cross-border payments using state-issued digital currencies in the region.
China Proposes Asia-wide Digital Yuan Minting Underpinned by Distributed Ledger Technology
Chinese government researchers have proposed introducing a new digital currency to Asia to reduce the region’s dependence on US fiat currency. The common coin will also help safeguard financial stability while enhancing regional currency cooperation, the South China Morning Post quoted this week.
According to Song Shuang, Liu Dongmin and Zhou Xuezhi of the Institute of World Economics and Politics under the Chinese Academy of Social Sciences, the digital token will be pegged to a basket of 13 currencies including the Chinese yuan, Japanese yen and South Korea. won, and that of his 10 member of the Association of Southeast Asian Nations, ASEAN.
Each weighting could be similar to that of the International Monetary Fund’s special drawing rights, which act as an international reserve asset, the report details. Distributed ledger technology could be employed to underpin the proposed currency. Such an approach aims to prevent domination of any of the participating countries.
“More than 20 years of deepening economic integration in East Asia have laid a good foundation for regional currency cooperation. I wrote in an article published in August in the Ministry’s World Affairs Journal and posted online in late September.
China likely to lead new Asian digital currency project if it gains support
This is not the first initiative to create a community currency in Asia. Other examples include those proposed by Malaysian Prime Minister Mahathir Mahathir during the Asian financial crisis of 1997 and repeated in 2019, and his Asian Monetary Unit since 2006 by the Japan-led Asian Development Bank. (ACU) project.
If the latest initiative comes to fruition, it could be led by China, currently the world’s second-largest economy, and a constantly expanding pilot area for its own sovereign digital currency, the digital yuan. The People’s Bank of China (PBOC) recently announced that electronic yuan payments exceeded 100 billion yuan (about $14 billion) with 360 million transactions by the end of August.
The Chinese government claims that the Central Bank Digital Currency (CBDC) is primarily intended for domestic use (around 20 major cities participated in the test, with over 5.6 million merchants accepting the coin). ), and the PBOC is also considering cross-border payments. With the monetary authorities of Hong Kong, Thailand and the United Arab Emirates.
Do you think China’s proposal for an Asian digital currency will find enough support in the region? Share your thoughts on the matter in the comments section below.
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Chinese Researchers Propose Asian Digital Currency to Reduce Dependence on US Dollar
Source link Chinese Researchers Propose Asian Digital Currency to Reduce Dependence on US Dollar
