China is accelerating research work into digital currency as the country hopes to use new techniques to digitize paper currency and make transactions more transparent and efficient.
Since China floated plans for a legally-backed digital currency in 2014, two rounds of revisions have been made to the original plan while further research is still underway, according to Yao Qian, the central bank official leading the digital currency research center.
China will first introduce the currency in certain money markets and promote its use in a gradual and cautious way, Yao said, without giving a specific timetable.
Compared with traditional paper money, digital currency uses sophisticated cryptographic techniques, costs less to circulate, 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 will be issued by the central bank and be legally backed by the government as an alternative to paper money.