China is Creating a Digital Currency for all of East Asia

Kataryna Kovtun June 19, 2020


It is reported that Chinese officials are prepared to create a single digital currency for the countries of East Asia. It must be tied to the currency cryptocurrency used by the jurisdictions of East Asia.

Negotiations about a universal digital currency for three countries of the region — China, Japan, and South Korea — took the central place at the recent meeting of the members of the Chinese political consultative conference. Formation of an alliance between countries will allow the conclusion of agreements on free trade in the framework of the general commercial zone.

A group of 10 members proposed link crypto active to the basket of currencies, including the Chinese yuan, the Japanese yen, the South Korean won, and the Hong Kong dollar. The main share of the support coefficients will be provided by the Chinese yen and the Japanese yuan with 60% and 20% respectively.

The committee is considered to be the highest political advisory team. Among the members of this group are people who are influential in the country, for example, Ctrip co-founder and Vice President Neil Shen with a net capital of about $ 1.6 billion, Hong Kong political leader Henry Tang and others.

Reason for Creating a Single Currency

The development of this initiative coincided with another round of tension between China and the United States. This was seen as an attempt to weaken the influence of the dollar in the region.

Meanwhile, the Chinese CBDC has already passed the test by the State Agricultural Bank of China (ABC). The pilot program was deployed in four regions — Chengdu, Suzhou, Xuan, and Shenzhen. The exact date of the launch of the digital yuan has not yet been decided, but it is believed that it will be introduced before the end of this year.

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