Researchers from a Chinese state-operated think tank have now floated the idea of an Asia yuan digital currency intending to reduce its reliance on a US dollar-based economy.
The opinions of researchers Song Shuang, Liu Dongmin, and Zhou Xuezhi from a unit of the Chinese Academy of Social Sciences (CASS) were highlighted in an issue of the World Affairs journal published online in late September, who stated that the establishment of an Asian yuan token would lower Asia’s reliance on the USD.
Much like the same existing and tested central bank digital currencies (CBDCs), the researchers stated that distributed ledger technology (DLT) would create the backing of the Asian token, which would be pegged to a basket of 13 currencies.
The proposed DLT-backed ‘Asian Yuan’ token would allegedly help in reducing Asia’s dependence on the US dollar for international business. The currencies expected to peg the token would consist of those of all the 10 member states in the Association of Southeast Asian Nations (ASEAN) together with China’s Yuan, South Korea’s Won, and Japan’s Yen, according to the researchers.
Notably, the researchers wrote in the journal seen by the South China Morning Post (SCMP):
“More than 20 years of deepened economic integration in East Asia has laid a good foundation for regional currency cooperation. The conditions for setting up the Asian Yuan have gradually formed.”
The journal is mainly affiliated with China’s Foreign Affairs department, with most of the researchers hailing from the “Institute of World Economics and Politics” one of many research units under CASS, a think tank with different links to the nation’s ruling party.
The United States dollar and, much more recently, cryptos have become a popular strategy for people in South East Asia who wish to conduct business, send remittances, and hedge against inflation of their respective local currencies.
Buy Bitcoin NowThis research came several weeks before a milestone in China’s CBDC pilot, the Bank of China said on October 10 that its e-CNY had transacted nearly $14 billion in value, translating to 100 billion yuan, with nearly 5.6 million merchant stores already supporting the digital yuan.
The nation’s central bank is also partaking in Project Inthanon-LionRock, a DLT-backed cross-border payment central bank digital currency test also involving the Thai, United Arab Emirates, and Hong Kong central banks.
In September, the trial saw the ‘successful’ transaction of more than $22 million worth of value in a month on its “Multiple CBDC Bridge” platform that was overseen by the Bank of International Settlements (BIS).
