Can an Asian CBDC displace the dollar?

In this post:

  • Can an Asian CBDC displace the dollar?
  • The CBDC will be tied to 13 currencies
  • China’s CBDC achieves a new milestone

A China-based think tank has discussed the idea of designing and developing an Asian CBDC, which could be used across the region. This idea was floated to help the continent reduce its dependence on the dollar while helping the CBDC challenge it. The report’s authors claimed that if the continent decides to design digital currency, it will be a game changer for them in the long run. The report was made available in the World Affairs Journal last month.

The Asian CBDC will be tied to 13 currencies

Like most digital currencies, the report stated that the Asian CBDC would be designed on a blockchain. The report further states that upon developing the digital currencies, they will be tied to about 13 currencies. The researchers mentioned that the currencies would make up all the members of the ASEAN nation.

The group contains member countries formed by all the Asian countries located in the southeast. Aside from those, the Asian CBDC will also be tied to currencies from China, South Korea and Japan. The researchers opined that countries in the eastern region of Asia have lived in accordance for more than 20 years. With this, they feel it is time to come together to design a regional currency.

China’s CBDC achieves new milestone

The researchers also said that most of the conditions required for the countries to design a collective Asian CBDC had been achieved. The journal where all the information is contained belongs to the foreign affairs department of China. The researchers are also employees of the World Economics and Politics institute. The body is one of the few think tanks with ties to the ruling party of China. Businesses and firms across Asia have relied heavily on the dollar and, in most cases, digital assets to carry out business-based transactions.

Aside from that, they have also employed currencies to evade inflation, among other issues. This research report is coming off the back of the recent milestone achieved by the Chinese CBDC. Reports claimed that the CBDC had already been used to carry out over $10 million worth of transactions this week. Asides from that, the number of stores helping with the testing of the digital currency had also reached about 6.5 million. China is also working with the premier banks in some other countries to create a joint CBDC, which is presently undergoing trial. Last month, the report claimed that the CBDC had been used to carry out $22 million worth of transactions during its testing phase.

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