Chinese currency Bitcoin, the world ‘s biggest cryptocurrency, is surging in value as the country looks to diversify its economy.
As bitcoin surged, China’s central bank raised its benchmark rate from 6.9% to 7.5%, and the country’s central banker announced plans to issue bonds to raise money to support the currency.
China’s central banking said in a statement on Friday that the country will issue 4.6 trillion yuan ($7.5 trillion) of government bonds to support its currency, which is currently trading at around 2,600 yuan ($4,100).
The central bank said the bonds will be issued by the People’s Bank of China and will be backed by an amount of 15% of the total value of the bonds, the state-run Xinhua news agency reported.
The announcement comes as the Chinese central bank has been tightening monetary policy, announcing a cut in the central bank’s key interest rate to a record low of 6.75% from 7%.
It has also announced that it will introduce a special cryptocurrency called the yuan renminbi to allow people to store their cryptocurrency as a reserve.
As part of the move, the central Bank will allow people with the renminbium to trade yuan renmins for the yuan, which will be stored in the renmins account, Xinhua reported.
China has seen a sharp rise in the value of its currency in recent months, with the yuan now trading at nearly 12 times its previous value, according to Bloomberg data.
The renminbis have seen a surge in demand as China has seen growing acceptance of bitcoin and other digital currencies as a way to buy goods and services online.
In a separate move, China on Thursday released its first cryptocurrency, the yuan yuan, to the public, raising the value to nearly $100 per coin.
The move came after the yuan devalued to close at 1,872 yuan ($14.45) against the dollar in early trading.
The yuan renbinbi, the Chinese version of the bitcoin, is the countrys first digital currency.
The currency has become increasingly popular in China, where it is used to buy items on the black market.
The country has also begun offering yuan renmini trading, where Chinese buyers buy yuan renmenbi for yuan in exchange for local currency.