Top Chinese political advisers have proposed a regional digital currency that would be backed by four major Asian currencies including the Japanese yen, Korean won, Hong Kong dollar and the yuan.
The proposal unveiled Thursday describes the currency as a “stablecoin,” a term for cryptocurrencies designed to hold their value and backed by a reserve currency, although it does not explicitly mention crypto or blockchains.
The People’s Bank of China (PBOC) would lead the proposed effort. The basket of underlying collateral would follow the special drawing rights (SDR) model of the International Monetary Fund (IMF), where each country’s currency is assigned a different weight based on its economy.
As such, the proposal resembles the original vision for libra, before that Facebook-spawned project watered down its plans and pivoted to developing digital versions of individual fiat currencies. (The Libra Association recently welcomed Singapore investment company Temasek as its first state-owned entity member.)
The proposed stablecoin would help facilitate trade among the four countries, which is key to economic recovery in the region after coronavirus, its proponents said. It would do so by improving cross-border settlement and clearing services with a new payment network and digital wallet for enterprises.
Neil Shen, founding and managing partner of Sequoia China and a member of China’s upper house, presented the proposal to Chinese legislators during the Two Sessions, the country’s largest annual political gathering.
Nine other advisers who are also upper house members, including Kennedy Wong, a solicitor of the Supreme Court of Hong Kong, former chief secretary of Hong Kong Henry Tang and Hong Kong-based Chinese billionaire Songqiao Zhang, co-signed the proposal.
Shen attended the first session of the Chinese People’s Political Consultative…