China plans to create an "Asian yuan" to reduce dependence on the US dollar

The proposed "Asian yuan" will help reduce Asia's dependence on the US dollar in international business.

Researchers from a Chinese state think tank have proposed the idea of creating a digital currency for all of Asia with the aim of reducing its economic dependence on the US dollar.

Like existing and proven Central Bank Digital Currencies (CBDCs), the researchers claim that Distributed Ledger Technology (DLT) would form the backing of the Asian token, which would be pegged to a set of 13 currencies.

According to the researchers, the currencies would include those of the 10 member countries of the Association of Southeast Asian Nations (ASEAN) along with the Chinese yuan, the Japanese yen and the South Korean won.

The conditions for establishing the Asian yuan have been gradually forming," the researchers wrote in the journal seen by the South China Morning Post.

The US dollar and, more recently, cryptocurrencies have become a popular method for Southeast Asians to conduct business, send remittances, and hedge against inflation in their respective local currencies.

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