The current financial crisis has put the credibility of the US dollar in serious doubt while calls for multi-polarization of the international monetary system have grown. Some people have even suggested that now is a good time to introduce an "Asian dollar".
Looking at the resume of the euro as a single regional currency, however, one realizes that the buildup of an "Asian dollar" still lacks many indispensable conditions, which a financial crisis cannot create.
The idea of an "Asian dollar" can be traced back to a couple of background factors. One is Japan's "strategy to internationalize the Japanese yen for the 21st century" announced in 1999; the other is the birth of the euro on January 1, 1999 and the intent to challenge the hegemonic position of the US dollar began to emerge in the power structure of the international currency system.
The development of the two currencies joined the tide of East Asian regional cooperation and gradually spread an "Asian dollar dream" across the region.
The internationalization of the yen aims to turn it into a key international currency used in denominating international trade and investment and as foreign reserves. In short, it is aimed at making the yen a widely used currency in transactions around the world.
In fact, as early as the 1970s, the Japanese government raised the issue of yen internationalization when it used the yen as a means to divert the risks of the US dollar and ensure Japan's foreign trade interests.
In the early 1980s then US President Ronald Reagan offered the "concept of yen internationalization" to Japan. But, because Reagan's version of "yen internationalization" was designed only to nudge open Japan's financial market, it was naturally rejected by Tokyo without implementation.
The yen internationalization strategy for the 21st century was designed by Japan on its own and is aimed at advancing the multi-polarization of the international monetary system. Then Japanese Prime Minister Keizo Obuchi emphasized that yen internationalization should begin in Asia.
As a matter of fact, after the East Asian financial turmoil of 1997, the tide of regional cooperation gained strength and helped Japan's yen internationalization strategy achieve some initial results.
For example, Japan's yen-denominated export to Asian countries accounted for over 50 percent of its total in 2002, indicating the level of yen internationalization in Asia rose noticeably.
It is seen as one of the conditions for the Japanese yen to be the leading currency in the Asian monetary system, and a motive of the "Asian dollar concept".
As far as historical conditions for the birth of the euro are concerned, the European currency unit (ECU) and European currency unit system were undoubtedly indispensable conditions for the ultimate adoption of the euro. To push for the creation of the "Asian dollar", Japan also brought up the concept of "the Asian currency unit" and an "Asian common currency". On the road toward creating the "Asian dollar" Japan has been a pioneer.
