Science & Technology News

China proposes to create a single Asian cryptocurrency

Researchers at a Chinese state think tank have proposed the idea of ​​creating a digital currency for the whole of Asia with the aim of reducing its dependence on the US dollar.

A report by researchers Liu Dongmin, Song Shuang, and Zhou Xuezhi of the Chinese Academy of Social Sciences (CASS) was published in an issue of the World Affairs journal posted online at the end of September .

It is important to note that the idea of ​​a pan-Asian digital token emerged just as Beijing is trying to strengthen its economic influence in the region and its position as a world leader in the development of digital currencies. China is also diligently working to reduce its reliance on the US dollar system amid threats of financial disruption from Washington.

“More than 20 years of deepening economic integration in East Asia have laid a good foundation for regional monetary cooperation. Gradually, the conditions for the creation of the Asian yuan were formed,” CASS researchers said.

The digital token is expected to be pegged to a basket of 13 currencies, including the Chinese yuan, Japanese yen, South Korean won, and the currencies of another 10 member countries of the Association of Southeast Asian Nations (ASEAN).

The share of each of them can be similar to the share of special drawing rights of the International Monetary Fund, an international reserve asset. Distributed ledger technology will support the currency, preventing any one country from dominating and removing barriers to regional monetary cooperation.

It should be noted that already on October 10, the Bank of China, as part of the Digital Yuan Pilot Project (CBDC), conducted transactions in the amount of more than 100 billion yuan, which is about 14 billion US dollars. And about 5.6 million outlets in the country already accept the digital yuan.

The country's central bank is also present in the Inthanon-LionRock project, a DLT (distributed ledger technology)-enabled cross-border CBDC payments trial that also involves the central banks of Thailand, Hong Kong, and the United Arab Emirates.

China proposes to create a single Asian cryptocurrency