ASIAN countries like Thailand are slowly drifting away from international trade transactions using the U.S. dollar.
Thailand and China recently signed an agreement to strengthen cross-border payment using local currencies instead of the U.S. dollar as they started to realize their potential.
Both countries are also working together on the so-called multiple-central bank digital currency (multi-CBDC) project which is a common platform for wholesale cross-border payments.
The Bank of Thailand last year expressed its support for the use of local currencies to settle its international trades instead of the US dollar.
The central bank’s assistant governor for financial markets operations believes that the use of local currencies such as the Chinese yuan, the Malaysian ringgit, the Indonesian rupiah, and the Japanese yen will minimize the risks posed by fluctuations in the US dollar while providing Thai businesses an alternative.
Other Asian nations that supported de-dollarization include India, Indonesia, and China.
Brazil, Russia, India, China, and South Africa – the five main founders of the influential BRICS also supported the concept of de-dollarization.
The use of the Russian ruble and Chinese yuan in the trade between the two countries reached 95% in 2023 which both sides hailed as a significant milestone.
The agreement was signed as Beijing and Bangkok prepared to de-dollarize their trade by promoting their national currencies.
