China offers another crypto project aimed against the leadership of the US dollar in international payments.
Chinese leaders intend to create a cryptocurrency for East Asia to reduce dependence on the US dollar and strengthen trade ties in the region.
According to Nikkei Asia, ten members of the China People’s Political Consultative Conference suggested building a digital currency that would be based on a basket of currencies from the Chinese Yuan, Japanese Yen, Korean Won, and Hong Kong Dollar. At the same time, Nikkei does not specify on which blockchain such cryptocurrency will be based.
The offer was put forward by Neil Shen, co-founder of Ctrip, a huge Chinese tourism and venture company, as well as Hong Kong politician Henry Tan. They propose that a new regional cryptocurrency be developed by a private company.
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The yuan and the yen can make up more than 60% and 20% of the value of the new digital currency, respectively, and this ratio will be calculated “based on the economic scale of the associated economies.”
Nikkei Asia says a new idea could come about as a response to Libra Association’s plans to launch a multi-currency LBR coin, which "will be no different from a digital dollar disguised as a currency basket for China." The publication also notes that Libra abandoned the idea of tying its stablecoin to the Japanese yen, which probably prompts China to add it to the basket of East Asian cryptocurrency.
Currently, information on the future digital renminbi, CBDC of China, remains scarce. The official launch date is also unknown, although ongoing experiments are being conducted in several cities and regions of China.