Ghaffour urges Asia to shape future of global monetary system
Abdul Rasheed Ghaffour, Governor of Bank Negara Malaysia, called on Asian policymakers to actively shape the evolving international monetary system. Speaking at the SEACEN Policy Summit, he highlighted the region's critical role amid shifts in currency dominance, geoeconomic fragmentation, and digitalization.
Three forces reshaping global finance
The international monetary system, long anchored by the US dollar, faces significant shifts.
While the dollar remains dominant, its share of global FX reserves has declined from 62 percent in 2012 to 57 percent in 2025, with other currencies gradually increasing their collective share.
This rebalancing is driven by risk management and a desire for resilience, especially as geopolitics and policy uncertainty rise.
Dollar funding can tighten quickly during stress periods, exposing vulnerabilities for emerging economies.
Simultaneously, geoeconomic fragmentation is reorganizing supply chains, trade links, and financial channels into regional blocs, making access and continuity critical.
Digitalization, through AI, tokenisation, CBDCs, and USD-backed stablecoins, further reshapes value and liquidity flows, introducing new regulatory challenges.
The IMF notes that if widely adopted, stablecoins can introduce run risks and fragment payment systems unless interoperability and supervision keep pace.
Asia's path to collective resilience
Asia is actively responding to these dynamics by strengthening its regional financial architecture and fostering orderly diversification.
Malaysia has significantly deepened local-currency settlements with key partners like Thailand, Indonesia, and China, demonstrating a clear trend towards reduced reliance on a single currency.
For instance, settlements with Thailand grew from RM1.9 billion in 2009 to RM11.7 billion in 2024.
In 2025, ASEAN+3 finance leaders agreed to enhance the CMIM by establishing a rapid financing facility for shocks and transitioning to a paid-in-capital model.
Cross-border payment linkages across ASEAN member states expanded significantly, with QR and P2P transactions seeing substantial increases.
This collective resilience aims to ensure economic activity continues even when external conditions are challenging, emphasizing regional buffers and interoperable payment systems.
From passive taker to active shaper
This speech underscores Asia's critical juncture, moving beyond reactive adaptation to proactive leadership in global finance.
It emphasizes the necessity of regional cooperation and technological preparedness to mitigate external shocks and secure policy space.
Such a strategic shift is crucial for Asia to leverage its economic weight and influence the evolving international monetary system.