People's Bank of China is working on its own centralised and traceable cryptocurrency

Despite launching a crackdown against the exchange and use of Bitcoin or any other form of privately issued digital currency, China's central bank – People's Bank of China (PBOC) – is working to get its own, centralised cryptocurrency into circulation.

On Saturday (4 November) in Beijing, Yao Qian, who is leading the research work for the state-controlled cryptocurrency at PBOC, stressed on the need of digital legal tender. He noted digital currency would not only cut transaction costs but also extend financial services to rural areas while increasing the efficiency of monetary policies.

"The development of digital economy needs central bank-issued electronic currency more than ever. It's crucial to speed up the research and issuance," Qian was quoted as saying by the South China Morning Post.

The remark from Qian falls in line with comments from the governor of the bank who earlier this year said that China was exploring its own digital currency.

The research towards state-controlled cryptocurrency follows China's rigid stance against privately issued digital currencies. After prohibiting Chinese financial institutions from holding virtual currencies in 2013, the country has banned fundraising via Initial Coin Offerings (ICOs) as well as the operation of Bitcoin exchanges.

Speaking on this contradiction, Qian told South China Morning Post, "What the central bank have in mind is a centralised digital currency among all. As money has evolved from the barter system to its metallic and paper forms, it is now going digital."

He further added virtual currency will have a major impact on the global financial system and will prove extremely beneficial for the PBOC, which would have greater autonomy to track the volume as well as whereabouts of the money issued to rework its monetary policies.

Though it is still unclear what China's state-controlled cryptocurrency will be called or when it is supposed to be introduced, the move appears to come just as Russia reportedly gears up to introduce its own, traceable digital currency CryptoRuble. Interestingly, just like China, Kremlin has also taken serious steps to tackle cryptocurrency in the past.