Could East Asia create a common central bank digital currency (MNBC), to solidify the region’s economic cooperation? Yes, according to researchers associated with the Chinese state, who see it as a means of mitigating the hegemony of the dollar. What might that look like?
Asie : bientôt une MNBC commune pour concurrencer le dollar ?
A regional MNBC for East Asia
China is the most advanced economy of scale in terms of central bank digital currency (MNBC). The country has already partially offered its digital yuan, in a desire to position itself more quickly than other major powers. And she could go on with her plans by offering a common MNBC to several Asian countries.
In any case, this is what Chinese state researchers are talking about, who published their conclusions on this subject at the end of September. According to the Institute for Global Economics and Policy paper, creating a central bank digital currency backed by a basket of Asian currencies is now possible:
“More than 20 years of growing economic integration in East Asia has created a good foundation for cooperation around a regional currency. The conditions for setting up the Asian yuan were formed gradually. »
👉 Going Deeper – Digital Central Bank Currencies (MNBC) – What are they and how do they work?
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13 fiat currencies to back the “Asian yuan”
This MNBC would be backed by a basket made up of 13 currencies. The main fiat currencies of the region would be found there, including yuan, Japanese yen, South Korean wonas well as the currencies of the countries that are part of the Association of Southeast Asian Nations (ASEAN).
Distributed ledger technology would be used to create this Asian MNBC. This would allow – among other things – to make the monetary systems of the different countries work harmoniously.
The idea is of course to decrease the need to rely on the US dollar. The questioning is not new, and it is a fundamental project of China, which had already greatly motivated the launch of its digital yuan. According to the researchers, this would allow Asia to face less risk:
“East Asian countries have long settled their trade in dollars, which exacerbates the currency gap and exchange rate risks. This was the trigger for the Asian financial crisis of 1997.”
👉 Read also – Russia plans to use digital ruble with China to end dollar hegemony
China would lead the project?
Due to its economic weight and experience with the digital yuan, China would presumably lead the project. It will be recalled, however, that nothing is done, and that it is simply a research publication – even if it comes from a body affiliated with the Chinese state.
In 2006, Japan had tried to create a common currency in Asia, but the project had not succeeded. Will this new eventuality be more durable? It is possible, at a time when all the major economies are working on MNBC projects.
👉 Also in the news – SWIFT shares promising experiences with MNBC and tokenized assets
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Published by Editions Larousse
Source: South China Morning Post
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Journalist at Cryptoast, I fell into the pot of cryptocurrencies a few years ago. I am passionate about the innovative technologies that stem from the blockchain and I like to find the most crispy information to share with you.
Marine Debelloir
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