South China Morning Post reported that experts supported by China have advocated for the establishment of a pan-Asian digital currency to contest the supremacy of the U.S. dollar in the region.
The report claims that East Asia now has the economic prerequisites for establishing a regional digital currency.
The planned virtual currency will be tethered to 13 regional fiats, such as the South Korean won, the Japanese yen, and the Chinese yuan. The partnership will also include the remaining ten Association of Southeast Asian Nations (ASEAN) members.
According to the researchers, distributed ledger technology could be utilised to develop crypto assets, guaranteeing that no nation would seize power and fostering collaboration.
The proposal’s primary reason, though, is to lessen the region’s reliance on the US dollar, which proponents argue will assist to ensure financial stability. The US rate increases are having a negative impact on countries all over the world with their foreign exchange reserves.
However, this is not the only nation to propose an Asian regional currency. During the 1997 Asian economic crisis, Malaysian Prime Minister Mahathir Mohamad proposed such, and in 2006, the Asian Development Bank, which is run by Japan, adopted the very same.
China’s digital yuan money has already been tested in 23 major cities. This is at a time when other international leaders are still debating the merits of a digital currency.
Since its introduction in late 2021, China’s use of its national digital currency has increased. According to authorities, by the end of August, transactions utilizing the digital Yuan topped 100 billion Yuan (about $14 billion).
Earlier this year, the WSJ also stated that Beijing and Saudi Arabia were in negotiations about utilizing the Yuan for some gas transactions.
