ASEAN Nations Meet to Discuss Dumping US Dollar, Euro, and Yen for Trade and Phasing Out Visa and Mastercard
Recently, finance ministers and central bank governors from the Association of Southeast Asian Nations (ASEAN) met to discuss reducing dependence on external economic powers and exploring alternative reserve currencies and payment systems.
One of the key topics of discussion was phasing out the US dollar, euro, and yen as reserve currencies in the region. The ministers and governors are exploring the possibility of establishing a new currency that would be used for intra-ASEAN trade and investment. This move is in line with ASEAN's goal of greater economic integration and reducing exposure to fluctuations in the US dollar exchange rate.
According to The Cradle, a digital media company that covers business and technology news in Southeast Asia, the finance ministers and central bank governors are looking for a way to trade in their own currency, rather than relying on external currencies. This could potentially lead to the establishment of a new currency, which would further promote economic integration in the region.
In addition to exploring alternative reserve currencies, Indonesia, one of the largest economies in ASEAN, has called for phasing out Visa and Mastercard in the region. The country is promoting its domestic payment system, GPN (Gerbang Pembayaran Nasional), and reducing dependence on foreign payment systems.
This move is part of a broader trend in Southeast Asia towards developing domestic payment systems and reducing reliance on foreign providers. China has already introduced its domestic payment system, UnionPay, which has gained significant market share in the region.
However, there are significant challenges to establishing a new currency or payment system. ASEAN countries have different levels of economic development, and some countries may be reluctant to give up their current reserve currencies. There are also questions about the stability and credibility of a new currency or payment system, and how it would be regulated.
Despite these challenges, ASEAN countries are keen to explore alternative reserve currencies and payment systems as part of their efforts to promote economic integration and reduce dependence on external powers.
Overall, the discussions around phasing out traditional reserve currencies and payment systems demonstrate ASEAN's commitment to promoting economic integration in the region and reducing dependence on external economic powers.
References:
- ASEAN considers dropping US dollar, euro, yen as reserve currency, The Straits Times, 26 Mar 2022.
- ASEAN Nations Meet to Discuss Dumping US Dollar, Euro for Trade, The Cradle, 22 Mar 2022.
- Indonesia wants to phase out Visa, Mastercard in Southeast Asia, Bloomberg, 29 Mar 2022.
- China's UnionPay seeks to expand in Southeast Asia as Visa, Mastercard face headwinds, Nikkei Asia, 29 Mar 2022.
