With the ASEAN and BRICS nations consistently expanding their efforts to create a new currency system, the US dollar continues to show its mettle to the world.
Despite the de-dollarization drives that the world is contributing to, the US dollar stands tall with all its might. Leaving the US dollar to pursue other currency systems without a robust currency system may prove detrimental to these five ASEAN nations.
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ASEAN Nations New Currency System Update
According to a recent CME update, the ten bloc nations are building a new currency system, intending to rival the US dollar.
The new currency system, per the organization, is set to usher in a prosperous era for the collective nations. Dubbed the novel “unified currency,” this new development will help ASEAN nations secure better global prestige.
“Furthermore, such a currency should aim at competing with the USD and the Euro as a reputable reserve of value.”
How Does This Development Impact These 5 ASEAN Nations?
Without a robust currency structure, contributing to the de-dollarization narrative can be detrimental to countries in multiple ways.
If Thailand ditches the US dollar, it may impact its tourism exports and foreign investors’ arenas, as the country relies heavily on the USD for trade.
Malaysia is another country reliant on the US dollar, particularly in areas related to trade and investment. Dumping the US dollar may hamper such sectors drastically in the long run.
Indonesia is the most prominent member of ASEAN. Given the nation’s contribution to the de-dollarization drive, dumping USD for an alternate currency system may entail regional implications. If USD demand falls in the region, Indonesia’s trade, investment, and financial sectors may suffer.
The Philippines is another nation that may suffer due to intense de-dollarization. The nation heavily relies on remittances from overseas workers that are usually denominated in the US dollar. If the concept of de-dollarization catches pace, the country may document a significant economic downfall.
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Lastly, Singapore, the global financial hub, can also encounter stark investment, trade, and finance anomalies if it ditches the USD in the long haul.