IBM is looking at the blockchain technology to develop a system of payments similar to bitcoin for major fiat currencies like euro and dollar, Reuters reports.

Transactions in the new digital currency would be open to everyone via a public ledger in a local currency such as the dollar or euro. “It’s sort of a bitcoin but without the bitcoin,” Reuters’ source said.

However, the report contains a number of controversial statements. According to the unnamed source, the new currency would at the same time abandon the idea of decentralization and would be controlled by central banks.

“These coins will be part of the money supply,” the source said. “It’s the same money, just not a dollar bill with a serial number on it, but a token that sits on this blockchain.”

The system considered by IBM is reportedly intended to serve the purposes of some central banks that have stated their interest in the technology behind bitcoin. Rumours about FedCoin, a government cryptocurrency, have been around since early March.

“The company has been in informal discussions about a blockchain-tied cash system with a number of central banks, including the U.S. Federal Reserve, the source said. If central banks approve the concept, IBM will build the secure and scalable infrastructure for the project.”

Members of the bitcoin community gave a range of responses to the reported plans on Reddit. Some users believe the new fiat cryptocurrency to be a direct attack on the principles of bitcoin and an attempt on the part of central banks to control digital systems. One user was quite straightforward:

“This isn’t Bitcoin. It’s a dollar pegged to an Excel spreadsheet entry with a big fancy wrapper put on it.”

Many were disappointed about the lack of thought-through details of how the system would work. Others were more optimistic and considered the potential benefits of the proposed system for bitcoin:

“What could very likely happen is a side chain develops using USD, pegged to Bitcoin. Basically, this would allow dollars to be sent and verified by the Blockchain. Bitcoin would still remain the underlying currency that fuels the miners. Basically, [you] could send a micro transaction in BTC but attach dollars to it or stocks, whatever. ... There are different ways to send dollars using blockchain. Blockchain itself will not exist without bitcoin the currency.”

Last week Richard Gendal Brown, Executive Architect at the Industry Innovation, Banking, and Financial Markets for IBM UK, posted his thoughts on FedCoin in his blog, suggesting that integrating fiat currencies into smart contract systems could be “extremely useful”. Brown had discussed bitcoin adoption and the future of cryptocurrencies in an interview for Finextra as early as 2013.