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Over a month ago, speculation abounded on whether China was developing its very own cryptocurrency to essentially digitize RMB. Now we know quite certainly that the Central Bank of China has developed and is currently testing a cryptocoin.

Although there have been no official statements from China, according to several reports online, the Peoples Bank of China has been slowly testing its cryptocurrency through mock transactions between commercial banks within the country. The plan would be to eventually launch the digital currency alongside Chinas primary currency RMB (aka yuan). Some of the key benefits of having a fiat cryptocurrency for China include: making it easier forpeople in more rural areas that dont have access to traditional banks toreceive financialservices which would in turn lower transaction costs; greater oversight over other digital currencies like Bitcoin and Ether; as well as the reduction of corruption, fraud, and counterfeiting.Yao Qian, the Deputy Director of the Science and Technology Department at Chinas central bank recently authored an extensive report detailing many of the ways China could benefit from digital currencies.

One of the fears highlighted by some experts is the fact that by having a central digital currency, commercial banks could be undermined and lose customers. Chinas goal, though, is to integrate the digital currency into the existing banking system by allowing commercial banks to operate cryptocoinwallets for the central coin. The mock transactions between commercial banks would be a good place to test the planned integration.

Cryptocurrencies have been making headlines recently; mostly on account of the extreme volatilityinvolving the price of coins like Bitcoin and Ether as well as the many Initial Coin Offerings (ICOs) that have raised ridiculousamounts of money within a few hours and even minutes. With much of the news focused on only one aspect of the cryptocoin market, its easy to lose sight of the technologys many other uses. The central idea behind cryptocurrencies is decentralization; allowing people anywhere in the world to transact instantly with zero transaction costs.

The fact that a country as large as China is developing and prototyping a cryptocoin, even though it will likely be controlled and restricted by the central government, speaks volumes to the technologyspotential. China is not the only one getting involved, however. Last month, Singapore made headlines as well when it announced it had successfully digitized its currency. Canada, England, and Russia are also experimenting with cryptocurrencies. Hopefully, more countries will follow suit.

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China's Central Bank Testing Prototype Cryptocurrency - Crowdfund Insider