BEIJING, July 24 -- China's crude oil futures, the country's first domestic futures product tradable by overseas investors, will be priced and settled in yuan, the central bank said Friday.

Overseas traders and brokers can open yuan-denominated accounts at designated banks for settlement, and the funds cannot be used for other purposes, according a statement from the People's Bank of China (PBOC).

Crude oil futures will be traded on the Shanghai Futures Exchange. Overseas investors can use foreign currency for margins, but the money must be exchanged into yuan for settlement. Cross-border yuan flow will be monitored and the futures exchange must report overseas investors' trading every month.

The futures complement the existing global oil pricing system. China is one of the world's largest oil buyers and nearly 60 percent of its oil consumption comes from imports.