ASEAN nations meet to debate dumping of US dollar, euro and yen in trade and phasing out Visa and Mastercard cards
Recently, finance ministers and central bank governors from the Association of Southeast Asian Nations (ASEAN) met to debate reducing dependence on external economic powers and exploring alternative reserve currencies and payment systems.
One of the important thing topics of dialogue was the withdrawal of the US dollar, euro and yen as reserve currencies within the region. Ministers and governors are exploring the potential for establishing a brand new currency that might be used for intra-ASEAN trade and investment. The move is in step with ASEAN’s goal of greater economic integration and reduced exposure to US dollar exchange rate fluctuations.
According to The Cradle, a digital media company that presents business and technology news from Southeast Asia, finance ministers and central bank governors are in search of a method to trade in their very own currency relatively than counting on external currencies. This could potentially result in the establishment of a brand new currency, which might further promote economic integration within the region.
In addition to exploring alternative reserve currencies, Indonesia, one in every of the most important economies in ASEAN, has called for the phasing out of Visa and Mastercard cards within the region. The country is promoting its domestic GPN (Gerbang Pembayaran Nasional) payment system and reducing its dependence on foreign payment systems.
The move is a component of a broader trend in Southeast Asia towards developing domestic payment systems and reducing dependence on foreign suppliers. China has already introduced its national UnionPay payment system, which has gained significant market share within the region.
However, there are significant challenges in establishing a brand new currency or payment system. ASEAN countries have different levels of economic development, and a few countries could also be reluctant to desert their current reserve currencies. There are also questions on the soundness and credibility of the brand new currency or payment system and the way they might be regulated.
Despite these challenges, ASEAN countries are wanting to explore alternative reserve currencies and payment systems as a part of their efforts to advertise economic integration and reduce dependence on external powers.
Overall, discussions on phasing out traditional reserve currencies and payment systems display ASEAN’s commitment to promoting economic integration within the region and reducing dependence on external economic powers.
Bibliography:
- ASEAN considers abandoning US dollar, euro and yen as reserve currency, The Straits Times, March 26, 2022.
- ASEAN Nations meet to debate dumping of US dollar and euro for trade purposes, The Cradle, March 22, 2022.
- Indonesia desires to phase out Visa and Mastercard cards in Southeast Asia, Bloomberg, March 29, 2022.
- China’s UnionPay plans expansion in Southeast Asia amid Visa and Mastercard difficulties, Nikkei Asia, March 29, 2022.
