Chinese Officials Propose East Asia Digital Currency to Rival Dollar and Libra
East Asia Digital Currency
Reports making the rounds and coming out of China is that the officials in the region are planning to embark on the production of an East Asia digital currency. According to the reports, the main objective behind the idea is the fact that China wants the region to depend less on the American dollar and encourage trade within the region. Nikkei Asia reports that about 10 members of the Chinese people’s political consultative conference, a political advisory group in china proposed the development. In their proposal, they noted that the digital currency should be backed by different currencies which would include the Chinese Yuan, Japanese Yen, South Korean Won, and the Hong Kong dollar.
New regional digital currency to consist of different currency
With the proposal still in the deliberation stages, the proposal failed to acknowledge the type of Blockchain protocol the digital currency would be based on. The leader of the proposal community is Neil Shen, a Venture capitalist and the co-founder of Ctrip and Henry Tang, a politician and former Chief of Secretary in Hong Kong. Based on the report, they noted that they would offset the contract out to a private contractor for maximum perfection. The input of each currency would be calculated based on the economic value, with the Chinese Yuan contributing 60% and Japanese Yen contributing 20%.
The article report by Nikkei Asia says that the Facebook-backed project, Libra, is trying to run on multiple currencies and will be called LBR. They noted that the Libra project looked like a wrapped digital dollar currency gifted to China by Facebook. This latest development falls in line with China’s plans to create a payment network that would exclude the US dollar, which is the most used currency for business.
Chinese CBDC details still unknown
With China already in the closing stages of the digital Yuan, which is backed by the people’s Bank of China, the details are still very much unclear. There is no official date for the launch of the CBDC even after pilot tests have been carried out in different locations of the country. Shenzhen, Chengdu, Ziogan, and Suzhou are part of the cities testing the currency with McDonald’s and Starbucks, helping China test it in their outlets. It is possible that the digital Yuan would be accepted as a means of payment in other countries, but what is unclear is if the east Asian digital currency would be prioritized over it.
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