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China's central bank plans to launch its own digital currencies

Wednesday, January 20, 2016 - 21:39
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China's central bank will allow funds in non-resident accounts (NRA) to be converted into fixed deposits, sources told Reuters, which could encourage foreigners' to keep trade-related earnings in the country and help authorities temper capital outflows.

[BEIJING] China's central bank wants to launch its own digital currencies to cut the costs of circulating traditional paper money and boost policymakers'control of money supply, the People's Bank of China (PBOC) said on Wednesday.

A PBOC research team set up in 2014 to look into digital currencies should make preparations for launches, according to a central bank statement.

"The team ... should set up a clearer strategic target for launching digital currencies, overcome the key technological barriers ... and aim for an early launch of the central bank's digital currencies," the PBOC said.

Virtual currencies can also help boost transparency of economic activities and curb money laundering and tax evasions, it added.

One of the most popular digital currencies is bitcoin, which is created through a 'mining' process where a computer's resources are used to perform millions of calculations.

But the rise of bitcoin, which is unregulated in many countries, has stoked concerns it can be used as a vehicle to launder money and finance extremist groups.

REUTERS