China proposes to create a common cryptocurrency for Asian countries

According to the initiative of state researchers, the asset will be pegged to a basket of 13 national currencies

14.10.2022 - 09:00

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What’s new? Chinese government researchers have proposed creating a pan-Asian digital currency to improve inter-regional relations and ease US dollar pressure. According to the initiative, the asset will be pegged to a basket of 13 national currencies, including the yuan, Japanese yen, and South Korean won. According to the South China Morning Post, backing the asset with distributed ledger technology will prevent domination by any one country.

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More about the initiative. According to the researchers, the tightening of US monetary policy by raising the interest rate provoked increased volatility in the financial market and had a negative impact on Asia's foreign exchange reserves.

The initiative to develop a proposed Asian cryptocurrency is likely to be led by China. The country already has experience in the creation and implementation of such technologies. Thus, by October, the volume of transactions with the digital yuan, launched in 2020, exceeded $14 billion. By this measure, the asset is the world's largest public digital currency. Currently, e-CNY is undergoing a pilot phase and is accepted in more than 5.6 million outlets.

Earlier, SWIFT successfully completed tests of national cryptocurrencies. Central banks of France and Germany, as well as large financial institutions, including HSBC, Standard Chartered, and UBS, took part in the experiment.

India's central bank also announced the launch of a digital rupee pilot project. The regulator noted that the asset can be used for both retail and wholesale payments.

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