China welcomes more currency exchange operations nationwide to facilitate individuals converting yuan into foreign currencies, according to a statement by the country's foreign exchange watchdog on April 24.

Effective May 1, domestic non-financial institutions need to meet a minimum capital requirement of 5 million yuan ($793,000) to start a currency exchange business in one city, the State Administration of Foreign Exchange (SAFE) said.

For companies that intend to set up such operations nationwide, the required minimum capital stood at 30 million yuan.

"We encourage the licensed institutions to develop their operations through chain outlets to achieve scaled efficiency," SAFE said when releasing the new rules on April 24.

It will also simplify the approval process and allow companies to operate more businesses, SAFE said.

"We would like to provide licensed institutions more convenience on the aspect of market access and daily operation, and give them more space to develop their businesses," it said, adding it will strengthen data monitoring to contain related risks.

The licensed currency exchanges must report transactions larger than $500 to SAFE in real time, and transactions smaller than $500 within 24 hours, according to the new rules.

Under current regulations, Chinese individuals can exchange up to $50,000 a year. Exchanges above that amount need approval from SAFE.

Ding Zhijie, a professor at the University of International Business and Economics, said the new rules would pave the way for the yuan's convertibility.

"While crashing illegal capital flows, the government is also opening channels for an easier way to convert the currency," Ding said.