NewsRescue
According to the news magazine Tempo, the Association of Southeast Asian Nations (ASEAN) is set to discuss dropping the US dollar, euro, yen, and pound sterling from transactions and shifting to settlements in local currencies.
On Tuesday, an official meeting of ASEAN finance ministers and central bank governors began in Indonesia. ASEAN is a regional organization comprised of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam with the goal of promoting economic and security cooperation among its members.
“Efforts to reduce reliance on major currencies will be discussed through the Local Currency Transaction (LCT) scheme.” According to the report, “this is an extension of the previous Local Currency Settlement (LCS) scheme, which has already begun to be implemented among ASEAN members.”
Tempo stated that a digital cross-border payments system that allows ASEAN member states to trade in local currencies would be expanded further. In November 2022, Indonesia, Malaysia, Singapore, the Philippines, and Thailand reached an agreement on such cooperation.
President Joko Widodo of Indonesia has urged regional authorities to abandon Visa and Mastercard payment systems in favor of credit cards issued by local banks. Widodo believes that moving away from Western payment systems is necessary to protect transactions from “possible geopolitical repercussions.”
Dodit Proboyakti, a board member of the Indonesian Credit Cards Association (AKKI), told RIA Novosti that Indonesia would use Russia’s experience with the Mir payment system to promote its own domestic financial network.
