China, the world second largest economy is planning to launch its own digital currency, in a move to cut its circulation cost on paper money and improve its grip on money supply.
According to CNN, the People Bank of China (PBOC) has been studying digital currencies since 2014 and is reviewing what implementation would look like. However, it did not give a timeline for when the digital currency would be introduced.
The Issuing digital money could help "reduce the high costs of circulating traditional currencies ... boost the convenience and transparency of transactions, reduce money laundering, tax evasion and other criminal acts," according to the statement released by the bank.
A digital currency could "enhance the central bank's control of money supply and circulation," the bank's statement added.
According to CNBC, PBOC was of the view that the currency should be launched early. "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,"
Digital currencies are rising in popularity in recent years, since the introduction of ‘Bitcoin’ in 2009. The currency was created through a 'mining' process where a computer's resources are used to perform millions of calculations. Bitcoin allows transactions to be made without any middle men and without revealing one’s real identity.
However, it remains unregulated in many countries; raising concerns it can be used in money laundering and finance extremist groups.
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