To reduce the U.S. dollar dependency of East Asia most especially with international transactions, China has started to consider launching cryptocurrency in the said region.
As advised by Nikkei Asia, members of the China People’s Political Consultative Conference advised constructing a virtual currency that would be based on a basket of currencies from the Chinese Yuan, Japanese Yen, Korean Won, and Hong Kong dollar. At a similar time, Nikkei did not specify on which blockchain such cryptocurrency is going to be primarily based on.
A proposal that a new regional cryptocurrency be developed by a non-public firm as offered by Neil Shen, co-found of Ctrip in addition to the offer of Hong Kong politician, Henry Tan.
Both the Japanese Yen and Chinese Yen can be up to more than 60% and 20% of the value of the new cryptocurrency, respectively. This mentioned ratio can be computed “based on the economic scale of the associated economies.”
Nikkei Asia says a replacement plan might happen as a response to Libra Association’s plans to launch a multi-currency LBR coin, that “will be no totally different from a digital dollar disguised as a currency basket for China.” The publication additionally notes that Libra abandoned the concept of fastening its stablecoin to the Japanese yen, that most likely prompts China to feature it to the basket of East Asian cryptocurrency.
At the moment, data on the longer term digital renminbi, CBDC of China, remains uncommon. The official launch date is furthermore indefinite, though existing trials are being conducted in many cities and regions of China.