As globalization deepens its roots across the world, the importance of small countries' currencies is diminishing in economic terms, thus paving the way for a common currency regime. After the launch of euro, the Asian economies are now debating over the feasibility of common currency for their region. It is expected that the emergence of this common currency will reduce transaction costs across the Asian frontiers and play a major role in formal trade, which in turn would earn valuable revenue for the government.

The introduction of euro in 1999 has resulted in the currency system slowly shifting towards common currency regime. The universal dominating currencies like dollar, yen and now euro have given the concerned countries competitive advantage over the Asian countries. As a result, Asian economies are now debating over the feasibility of introducing common currency for their region.

The idea for an Asian common currency was first proposed by the Philippines and Hong Kong. The suggestion was for the creation of an Asian Currency Unit (ACU), analogous to the European Currency Unit (ECU), which was the precursor of the euro. Creating a synthetic currency like the ACU may be a viable route to monetary union in Asia in light of the absence of a single dominant currency or country.