China to take on Bitcoin, Facebook's Libra, and the US dollar with digital currency scheme

Proposals for a Bitcoin-inspired East Asia digital currency scheme that would include the Chinese yuan, Japanese yen, South Korean won, and Hong Kong dollar were put forward during at a meeting of the Chinese People's Political Consultative Conference, a political advisory body, held in June 2020.

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.

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, Forbes cited a Nikkei Asian Review report.

It is thought the scheme will create a cross-border payment network to ease international trade. This project comes at a time when US-China relations are deteriorating and the US using its dollar dominance to sanction adversarial countries.

Furthermore, the proposals come as China begins trialling payments in its new digital currency across four major cities. Other countries around the world, including Norway, Sweden, and Japan, are all working on digitalising their own currencies.