China floats idea of 'Asian yuan' to reduce reliance on US dollar
Researchers from a Chinese state-run think tank have floated the idea of an Asia-wide digital currency with the aim to reduce its reliance on a United States dollar-based economy.
The views of researchers Liu Dongmin, Song Shuang, and Zhou Xuezhi from a unit of the Chinese Academy of Social Sciences (CASS) were published in an issue of the “World Affairs journal” posted online in late September, who said the establishment of an “Asian yuan” token would lower Asia’s reliance on the U.S. dollar.
Much like similar existing and trialed Central Bank Digital Currencies (CBDCs), the researchers said distributed ledger technology (DLT) would form the backing of the Asian token which would be pegged to a bundle of 13 currencies.
The currencies would include those of all 10 of the member nations in the Association of Southeast Asian Nations (ASEAN) along with China’s Yuan, Japan’s Yen, and South Korea’s Won according to the researchers.
“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 researchers wrote in the journal seen by the South China Morning Post.
The journal is affiliated with China’s Foreign Affairs department with the researchers hailing from the “Institute of World Economics and Politics” one of many research units under CASS, a think tank with various ties to the country's ruling party.
The U.S dollar, and more recently cryptocurrencies have become a popular method for those in South East Asia to conduct business, send remittances, and hedge against the inflation of their respective local currencies.
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