A proposal for a regional digital union using stablecoin (a virtual currency backed by standard currency) was introduced by Chinese representatives last week. The project would be led by China’s central bank – People´s Bank of China. Currencies backing the future regional digital currency would be based on similar principle to virtual currency unit of International Monetary Fund, known as Special Drawing Rights (SDR).
According to the Chinese, the proposed stablecoin should improve trading with goods and make capital flows between the countries more flexible. An established regional currency union would be working on the principle of clearing accounts. This means that money transfers would concern only net trade balances or capital inflows or outflows. Chinese representatives should now present their proposal to other regional counterparts.
