Chinese Researchers Propose Asian Digital Currency to Reduce Reliance on US Dollar – Finance Bitcoin News

Experts from an economic institute in China have circulated the idea of ​​creating a digital currency based on blockchain technology that could reduce Asia’s dependence on the greenback. The initiative comes amid an expanding digital yuan pilot and following recent trials of cross-border payments in state-issued digital currencies in the region. .

China proposes pan-Asian digital yuan minting underpinned by distributed ledger technology

Chinese government researchers have proposed the introduction of a new digital currency in Asia in order to reduce the region’s dependence on US fiat. The common currency will also help protect financial stability while strengthening monetary cooperation in the region, they said, quoted by the South China Morning Post this week.

According to Song Shuang, Liu Dongmin, and Zhou Xuezhi from the Institute of World Economics and Politics of the Chinese Academy of Social Sciences, the digital token will be pegged to a basket of 13 currencies, including cryptocurrencies. Chinese Yuan, Japanese Yen, Korean. won, and those of the 10 members of ASEANAssociation of Southeast Asian Nations.

The report details a weighting for each that could be similar to the International Monetary Fund’s special drawing rights, which act as an international reserve asset. Distributed ledger technology can be used to fortify the proposed currency. Such an approach would be aimed at preventing domination by any of the participating states.

“Over 20 years of extensive economic integration in East Asia has laid a good foundation for monetary cooperation in the region. The conditions for the establishment of the Asian renminbi have gradually formed,” the researchers wrote in an article published in August by World Affairs, a publication affiliated with China’s Ministry of Foreign Affairs. – and then posted online at the end of September.

China Likely to Lead New Asian Digital Currency Project if It Is Supported

This is not the first initiative to create a regional currency in Asia. Other examples include Malaysian Prime Minister Mahathir Mohamad’s proposal made during the 1997 Asian financial crisis, which he repeated in 2019, as well as the Japanese-led Asian Development Bank project Head of the Asian Monetary Unit (ACU) since 2006.

The latest initiative, if implemented, is likely to be led by China, which is now the world’s second largest economy and is constantly expanding the pilot area for its own proprietary digital currency. own rights, the digital yuan. The People’s Bank of China (PBOC) recently announced that electronic CNY payments have been overcome 100 billion yuan (nearly $14 billion) in 360 million transactions at the end of August.

Although the Chinese government maintains that its central bank digital currency (CBDC) mainly for household use – about two dozen major cities attend in testing with more than 5.6 million merchants accepting the coin – PBOC also discover cross-border settlements, along with the monetary authorities of Hong Kong, Thailand and the United Arab Emirates.

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Do you think China’s proposal for an Asian digital currency will get enough support in the region? Share your thoughts on this topic in the comments section below.

Lubomir Tassev

Lubomir Tassev is a tech-savvy Eastern European journalist who likes Hitchens’ quote: “Becoming a writer is in my nature, rather than what I do”. Besides cryptocurrency, blockchain and fintech, international politics and economics are two other sources of inspiration.

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