China has said it will allow its citizens to buy and sell bitcoin in yuan and other foreign currencies in a move that could open up the currency to more people.
The People’s Bank of China said it was introducing the yuan-based exchange market on Monday in a bid to expand the use of digital currencies as a payment method.
The bank said the exchange market, which will be open in the coming months, will be aimed at the use and acceptance of digital assets such as bitcoin, ether, and other digital currencies by Chinese citizens.
The move comes amid heightened scrutiny on digital currencies in China following a crackdown by authorities on online trading and illicit activity.
The yuan-denominated exchange market will allow China’s foreign exchange reserves to be used to cover the costs of digital asset trading, the bank said in a statement.
“This will make the use, exchange, and exchange services more accessible to the general public,” the bank added.
“The exchange market is expected to become a significant player in the Chinese financial system in the next three to five years.”
The announcement came after China’s central bank announced that it would introduce the yuan exchange market to curb money laundering and terrorism financing.
It is expected that the new exchange market would open up bitcoin and other cryptocurrencies as a way to hedge against a global slowdown in the value of the yuan and a slowdown in its appreciation against the US dollar.
Bitcoin is a digital currency that has been used as a form of payment for online transactions since 2011.
The currency has risen dramatically over the past year, gaining almost $300 billion in value to date, and its value has grown by more than 40 per cent since January.
China is one of the world’s largest economies and is the world leader in digital currencies.
The country has recently cracked down on money laundering in the digital economy, banning cryptocurrency exchanges.