The common currency would be similar to the European currency unit, in use in the EC until the introduction of the euro in 1999.

The SCO, which comprises Russia, China and four ex-Soviet Central Asian republics - Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan - held a summit in the Russian Urals city of Yekaterinburg on Tuesday.

The summit’s participants said that the current structure of the world currency system, dominated by the US dollar as the major global reserve currency, was far from ideal and that the appearance of new reserve currencies was inevitable.

Russian President Dmitry Medvedev told the summit that the Shanghai group member states should increase the share of national currencies in mutual settlements to reduce dependence on the dollar and improve the health of the global financial system.

"The current set of reserve currencies and the main reserve currency - the US dollar - have failed to function as they should," Medvedev told the summit, adding that the Russian ruble could hopefully become a reserve currency in the foreseeable future.