S Korean economist: China's yuan may be Asia's settlement currency

Special Report: Global Financial Crisis

SEOUL, May 5 (Xinhua) -- A senior South Korean economist said in a report on Tuesday that the Chinese currency yuan may emerge as a settlement currency in Asia.

"Trade volume between China and other Asian countries is huge. If the yuan is used as a settlement currency in the region, the need to hold the U.S. dollar will decrease for Asian countries," said Park Bun-soon, a senior fellow at the Samsung Economic Research Institute.

However, he said it will take time for the Chinese currency to be a global reserve currency.

"Although the overwhelming influence of the U.S. economy is falling, it won't be easy for any currency to challenge the established reserve currency," he said.

Park said although the yuan may not become the key currency, it could be recognized as one of the major international currencies like the dollar and the euro after 2030 when the size of the Chinese economy is expected to surpass that of the U.S.