The Bearer of Currency (What is Currency and its Essence)
The bearer of currency is the bearer of what? Currency is a means of value stora
The bearer of currency is the bearer of what? Currency is a means of value storage or circulation issued by any country or enterprise. Essentially, it is a unit of account and a tool for recording transactions. However, for a country’s legal tender, it is not fixed. It is supported by sovereign credit (such as the US dollar, etc.), and there is no central bank to guarantee that these currencies can be used as means of payment, settlement systems, trading media, or even as a pricing mechanism. All of this can be achieved through various mechanisms.
For example, we divide paper money into three types: fiat currency in the form of cash, physical form as bitcoin, and digital version in the form of electronic wallets. (Source: “The Economist”). Another type in this category is a type of paper bill with record-keeping functions that can be traced back to the storage and issuance in the late Qing Dynasty; asset-backed electronic notes based on virtual goods.
What is Currency and its Essence
The essence of currency is a unit of account, which is an asset issued by a country or institution.
Today, the so-called encrypted digital currency we are discussing is a form of “fiat currency” that can be used as a means of value storage, circulation, and exchange. Compared with the traditional financial system, it has higher efficiency, lower costs, and higher security, and it is very discreet: there are no deposit or withdrawal records in bank accounts, and there is no legal credit guarantee; in the payment system, funds need to be retrieved only when one merchant transfers funds to another, and such services are contactless.
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