The eager anticipation in Beijing for the Association of Southeast Asian Nations (ASEAN) to get on board the digital yuan train is palpable. Reports cite China’s vision to exhibit the digital capacity of its Central Bank Digital Currency (CBDC), the digital yuan, to ASEAN nations, hinting towards potentially fostering a ‘cross-regional’ usage in these member countries.
However, it’s worth noting the diverse political landscape among the ASEAN members, with some throwing their lot with China, while others maintain stronger allies in Washington. On the homefront, the cities of Nanning and Fangchenggang, located in Guangxi, are sounding the trumpets to pioneer a demonstration zone for digital yuan applications tailored to the ASEAN bloc. Notably, Fangchenggang is China‘s southernmost port city and a significant trading hub with ASEAN nations, while Nanning hosts the China-ASEAN Plaza and the relevance of the inaugural expo last year cannot be understated.
Dovetailing these ambitious initiatives is the notion of ‘free trade,’ which could amplify China-ASEAN cooperation. And complementing this strategy is the Bank of China’s fervor to unearth ROI-positive applications for the digital yuan across ASEAN, through its local branch’s participation in commercial tests for an inclusive CBDC ‘bridge project.’
Distinctly, Beijing’s original insistence that its CBDC was strictly for domestic use has evolved, with hints of explorations for cross-border CBDC pilots in the territories of Hong Kong and Macau. Testament to the international integration of CBDCs are Beijing’s allies, Minsk and Moscow, actively speeding up the issuance of their domestic CBDCs with a loud emphasis on cross-border CBDC interoperability.
Amid this intrigue, ASEAN nations’ pursuit of de-dollarization efforts might create significant opportunities. With the withdrawal of the US dollar from systems like ‘contactless QR code payment systems,’ there is a palpable vacuum that Beijing’s digital yuan could conveniently fill.
Early CBDC adopter, Cambodia might be intrigued by the prospects of CBDC-powered trade with nations such as China. Similarly, Indonesia’s ongoing de-dollarization task force and its interest in CBDCs could bring in more regional allies for digital yuan’s proposition, given the Bank of Indonesia’s nod towards cross-border usage potentials in its digital rupiah framework.
However, this treasury of hopes and efforts requires mutual interest and necessity from ASEAN nations, which is yet to manifest. The outcomes of these maneuvers will undoubtedly define the future landscape of digital currencies and their acceptance, adoption, or rejection within international trade frameworks.
Source: Cryptonews
