China moves forward with digital currency plans

Oct. 27 (UPI) -- China is one step closer to issuing the world's first digital currency following trials in several cities and the passage of a draft law on Friday.

The People's Bank of China is to issue the country's sovereign digital currency, officially referred to as the Digital Currency Electronic Payment system. The payments can be converted like cash, the South China Morning Post reported Tuesday.

China's DCEP will have no domestic competitors, according to Mu Changchun, head of digital currency research at China's central bank. Services in China including WeChat Pay and Alipay are only electronic wallets, the official said, according to the Post.

DCEP's "centralized management will be good to fight against cryptocurrencies and global stable coins and prevent their erosion of currency-issuance rights," Mu said.

China's central bank "will also face anti-counterfeit issues in the digital era, and...lower the cost" of use for citizens across the tech divide, the official said.

The Chinese government has reportedly been conducting trials with digital currency in four cities. In Shenzhen, a major Chinese city adjacent to Hong Kong, authorities gave out $1.5 million worth of digital currency in 50,000 packets to local residents, or about $30 each. The giveaway earlier this month was available to spend at 3,389 designated businesses, according to China Central Television.

China has typically undervalued its currency to lower the price of exports and gain an edge in global markets, but it has also been importing more goods from the United States.

Chinese news service Caixin reported Tuesday China imported nearly 3.9 million tons of U.S. crude oil in September, a 652.41% increase year-on-year.

Report of the data from Chinese customs comes after the Office of the U.S. Trade Representative said progress has been made in implementing agricultural provisions in the Phase One Agreement between the two countries.

China has implemented at least 50 of the 57 technical commitments under the Phase One Agreement, the U.S. office said in statement on Friday.