(Yicai Global) Aug. 22 -- At a seminar marking the 25th anniversary of the Asian financial crisis, experts said the countries in the region should build a diversified currency system to end the addiction to the US dollar and prevent another financial crash.

The problem of over-reliance on the dollar should be solved by introducing a common Asian digital currency, which, together with related arrangements, could help reduce the foreign exchange risk of a basket of currencies, Wataru Takahashi, a professor at Osaka University of Economics, told the seminar on Aug. 19. Meanwhile, related bonds to expand public financing in Asian countries could be issued, marking an important step in future financial cooperation within Asia, he added.

One of the causes of the Asian financial was the unreasonable international monetary system, for which the dollar was not only the currency of the United States but also a major international currency, Dai Xianglong, former governor of the People's Bank of China, noted at the seminar.

The global financial risks brought by the US are expanding, Dai pointed out. Compared with 25 years ago, the US’ share of the global economy has shrunk, but US monetary policy can still bring volatility to the global financial market, he said, adding that emerging economies continue to increase their US dollar reserves and take the risk in the foreign exchange market of investing in the greenback.

Asia has shown four signs of progress in monetary cooperation since the financial crisis: founding the Asian Monetary Fund, signing the Chiang Mai Initiative, setting up the Asian bond market, and proposing the Asian Currency Unit, according to Yu Yongding, a member of the Chinese Academy of Social Sciences.

The ACU would be based on a basket of currencies drawn from the 10 countries of the Association of Southeast Asian Nations, China, Japan, and South Korea, and their central banks could stabilize their currencies against those of other members to avoid competitive depreciation. The ACU proposal was very important and lays the foundation for creating a common regional currency, Yu noted.

Dai advised the International Monetary Fund to expand its special drawing rights and allow part of the SDRs to be used for liquidity expenditure among members, strengthen China-European Union economic and trade cooperation to promote the stability of the euro, and steadily promote internationalization of the Chinese yuan to facilitate trade between China and other countries, including Russia.

Editors: Dou Shicong, Futura Costaglione