China has expedited research work on ‘digital currency’ in order to digitize paper currency and make transactions more transparent and efficient.
According to a report in Global Times, two rounds of revisions have been made to the original plan which was floated way back in 2014.
“China will first introduce the currency in certain money markets and promote its use in a gradual and cautious way,” Yao Qian, the central bank official leading the digital currency research center, told Global Times without giving a specific timetable.
Digital currency uses sophisticated cryptographic techniques and compared to the traditional paper money, it costs less in terms of circulation, improves transaction efficiency and boosts transparency.
The most popular digital currency is Bitcoin, which is not tied to a bank or government, and allows users to spend money anonymously.
Unlike Bitcoin, China's digital currency, however, will be issued by the central bank and it will be legally backed by the government as an alternative to paper money.