Chines researchers propose the digital Yan become an Asian wide digital currency
Some very frightening news has founds its way out of China. And I say frightening because that is the feeling I get when I think about the repercussions and the "what if" scenarios.
Why an Asian-wide digital Yuan?
The researchers cite the main reason being it will allow the region to break free of its Dollar dependency. As the US Dollar currently is working as the world's reserve currency. Thanks in part to the US geopolitical influence and dominant position as the world's biggest economy.
But if you have been paying attention, you will have noticed China and its economy. Not to talk about geopolitical influence is starting to rival the US. And they are looking to usurp their throne. And would very much like the Yuan to become the new reserve currency of the world. And if things continue on as they have been it will most likely become reality whether we like it or not.
The researchers also say that having access to the same currency would "help safeguard financial stability while enhancing regional monetary cooperation". I assume they mean that when everyone is using the same money it will be easier to do business across borders. Which in all fairness is true.
The 10 ASEAN member countries, source: https://www.weforum.org/agenda/2017/05/what-is-asean-explainer/
The researcher also proposes that the currency would be pegged to 13 different countries' currencies, including the Chinese yuan, Japanese yen, South Korean won, and those of the 10 members of ASEAN, the Association of Southeast Asian Nations. I assume this would be so that you always would be able to convert it back and forth between the digital Yuan and the country's own currency at the normal expected rates. Eliminating currency speculation on the digital currency.
It is however important to also note that this is not the first proposal of its kind. There have been other proposals in the region earlier.
It is also important to note that by the initial looks of things the new currency would not be the same as the Chinese e-Yuan, their CBDC. But I have no doubt that they would love to have their CBDC take the place of the digital Yuan in due time.
This as the e-Yuan test runs according to reports are looking very promising, sadly. They reported a total of $100 billion Yuan in transactions as of late August. That is roughly $14 billion dollars. I would expect this means a country-wide, or at least increased trail is just around the corner.
What is your thought on this proposal? Do you think it is likely to be looked favorably upon by other countries? Please share your thoughts in the comment section down below. If you would like to support me and the content I make, please consider following me, reading my other posts, or why not do both instead.
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They seem to be moving ahead with this in Asia. The goold old BIS.