(Photo/Xinhua)

Recently Governor of People's Bank of China (PBoC) Zhou Xiaochuan said that issuance of digital currency is under research by the PBoC in an interview with China's Caixin Weekly. At a seminar held in January, the PBoC said that it will further promote the work of digital currency on the basis of preliminary work and will issue the digital currency as soon as possible.

Globally, ways of payment have experienced great changes. Many countries have put issuance of digital currency on the agenda. China's research on digital currency makes the country stand at forefront of sovereign countries in the world.

For people in the finance industry, it is a significant reform to issue digital currencies. But what does it mean to ordinary people?

Replacement of paper currencies

There is not an exact definition for digital currencies. He Maochun, director of the Economy and Diplomacy Research Center of Tsinghua University, told Xinhua News Agency that on a general level, as one of electronic currencies, closely attached to internet technology, digital currency is characterized with payment and circulation functions and can act as a substitute of paper currency.

In current society, payment gradually turns to electronic format via WeChat Pay or Alipay.

However, money for trade via Alipay still comes from individuals' bank account, which indicates that actual money in Alipay is still paper currency.

People may feel similar when they use digital currency as they use electronic payment. However, the two payment formats differ from each other in essence.

Furthermore, digital currency is different from virtual currency. Currencies used in games are virtual ones. Virtual currency can only be bought with real currency but cannot be transferred into real currency.

Globally, "Bitcoin" is the most well-known digital currency. Other digital currencies include "Litecoin", "Dogecoin" and "YbCoin".

Bitcoin (File photo)

However, those digital currencies do not have a unite issuer, everyone can produce them and the currencies could be circulated worldwide. The PBoC will issue digital currency in the future.

The issuance and operation of digital currency should be based on the "central bank-commercial banks" binary system which is applied to traditional currency, according to Zhou.