It is also now ranked 5 th as the world FX currency in trading value and 6th as a payments currency in value. Given the steady internationalisation of the currency, the renminbi is expected to be on a gradual path to become a fully convertible currency, along with the emergence and expansion of major Chinese cities such as Shanghai, as formidable truly global financial centres. The ongoing accessibility to the domestic financial markets, if further accelerated, will set forth a virtuous 3/5  BIS central bankers' speeches  cycle of development that will facilitate greater use of the currency. Thus, should the internationalisation of the renminbi continue as expected, it will further cement its role as the influential currency for trade and investment, and some say, a path towards becoming one of the more significant global reserve currencies. What are the implications for Asia? Using an analogy is apt in describing the implications for Asia. Japan, a country experiencing approximately 1,500 earthquakes a year, is finding innovative ways to support its structures. Instead of using steel and concrete, traditional materials to strengthen its structure, a Japanese textile firm is experimenting with carbon fibre rope-curtains, which are tough and pliant to earthquake-proof a building. This will allow the building to realign itself when it is quivering during an earthquake. This company, Kengo Kuma and Associates, realising the potential risks from stress, also planted anchors around the structure to prevent the ground from rising up when the carbon-fibre curtain is activated.

Likewise, Asia should ensure it has its own ‘carbon-fibre curtain’ of policy adaptability and flexibility to manage destabilising movements in the financial system. Despite the inevitable diversification of de facto reserve currencies, the dollar will remain a significant force to facilitate global trade and cross-border capital flows. Thus, it is of primary importance for Asia, in particular the emerging markets, to ensure that economic fundamentals are strong and financial markets are resilient with adequate buffers. At the same time, we need to continuously improve the necessary infrastructure for corporates, businesses and financial institutions to transact in a multi-currency environment. Currently, cross-border trade within the ASEAN region are transacted and settled mostly in dollars despite almost half of ASEAN trade being intra-regional. It makes economic and business sense, that transacting in local currencies would enhance the efficiency of trade and investments, with strong probability of reducing the cost of doing business. In an environment of volatile market conditions, businesses will have more options to choose the currency to transact, providing flexibility and insulation from exogenous shocks. Greater usage of local currencies would be an impetus for the development of the region’s financial markets, consistent with ASEAN’s collective vision for an integrated cross-currency market. Malaysia has been forward-looking in preparing for the inevitability of a multi-currency market: i. We have diversified our international reserves into emerging market currencies in early 2000, including into renminbi assets. We were confident in the diversification benefits given the strength and sustainability of China and emerging markets’ economic growth.