China, poised to roll out its potentially game-changing digital yuan, is leading the way in development of bitcoin-like digital currencies.
Governments around the world are scrambling to keep up with the changing nature of money, kicked off bitcoin a little over a decade ago and turbo-charged by Facebook’s libra plans just last year.
Now, an influential group in China has revealed plans for an East Asia cryptocurrency scheme that could see a basket of currencies combined to take on bitcoin, Facebook’s libra and even the U.S. dollar.
Proposals for a bitcoin-inspired East Asia cryptocurrency scheme that would include the Chinese yuan, Japanese yen, South Korean won and Hong Kong dollar were put forward this month at a meeting of the Chinese People’s Political Consultative Conference, a political advisory body.
The plans, put together by 10 members of the advisory body, drew attention due to the participation of notable figures such the co-founder of Chinese travel services provider Ctrip and venture capital investor, Neil Shen, and Henry Tang, Hong Kong’s former chief secretary, according to a Nikkei Asian Review report.
The regional cryptocurrency is expected to be backed by all four currencies but weighted to their economic scale, with China’s yuan and Japan’s yen accounting for 60% and 20% respectively.
It’s thought the scheme will create a cross-border payment network to ease international trade at a time when U.S.-China relations are deteriorating and the U.S. using its dollar dominance to sanction adversarial countries.
The proposals come as China begins trialling payments in its new digital currency across four major cities, local media reported at the end of April.
Other countries around the world, including Norway, Sweden and Japan, are all working on digitalizing their own currencies.
China’s rapid expansion of its digital currency program has led to urgent calls for the U.S. to speed up development of a digital dollar.
However, regulator intervention in Facebook’s planned libra digital currency means it could eventually function effectively as a digital dollar equivalent.
Facebook’s Libra Association, a group organized by the social media giant to manage the digital currency, unveiled revised plans in April that will see it issue separate coins backed by individual fiat currencies such as the dollar and euro.