R

esearch teams from a Chinese state-run think tank have proposed the creation of an Asia-wide digital currency to reduce the country's dependence on a dollar-based economic system.

The views of researchers Liu Dongmin, Song Shuang, and Zhou Xuezhi from a unit of the Chinese Academy of Social Sciences (CASS) were released in a late September concern of the World Affairs journal, which said the emergence of an Asian yuan token would reduce Asia's relying on the USD.

The team said distributed ledger technology (DLT) will indeed establish the support of the Asian token, which will be positioned to a basket of 13 currencies, similar to existing similar and extensively tested central bank digital currencies (CBDCs).

According to the researchers, the currencies would include all ten ASEAN member countries, as well as China's yuan, Japan's yen, and South Korea's won.

The journal is associated with China's Foreign Affairs department, and the researchers are from the "Institute of World Economics and Politics," one of many units within CASS, a think tank with numerous connections to the country's governing party.

The US dollar, and more recently, cryptocurrencies, have become popular ways for people in South East Asia to continue to do business, send remittances, and hedge against currency inflation.

The study was conducted just a few weeks before a significant milestone in China's CBDC pilot, when the Bank of China announced on Oct. 10 that its e-CNY had handled around $14 billion in value, or 100 billion yuan, with approximately 5.6 million trader stores already promoting the digital yuan.

The country's central bank is also involved in Project Inthanon-LionRock, a DLT-backed cross-border payment CBDC court case that also includes the central banks of Thailand, Hong Kong, and the United Arab Emirates.

The trial has seen a successful transaction of more than $22 million in value in a month in September on its Multiple CBDC Bridge platform, which is supervised by the Bank for International Settlements (BIS).

How do you think this would impact the global economy? What could be the potential drawbacks of having an Asian yuan? Let us know your thoughts by sharing this article online.

Posted 
Oct 14, 2022
 in 
Crypto News
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