Why is the Korean Won a large number (Why is the Korean Won not valuable like the Renminbi)?

08/20/2023 10:52 • Blockchain Briefs • 102 views

Why is the Korean Won a large number? In Korea, the Korean Won has two forms: one is “digital gold” and “currency”. The other is a digital token supported by “virtual assets”. Due to the characteristics of blockchain technology, it can be traded, exchanged, and used as a store of value in various ways. However, many project parties have not considered these characteristics in issuing the Korean Won. “Digital gold”, also known as “virtual assets”, actually refers to a specific currency generated through a combination of various encryption technologies. This digital representation represents a special commodity – physical gold (mainly paper products).

Why is the Korean Won not valuable like the Renminbi?

Editor’s note: This article is from Hello Blockchain (ID: hellobtc), authored by Wu Huoqiu, authorized and reprinted by Odaily Planet Daily.

Why is the Korean Won not valuable like the Renminbi? In the past year, the Korean Won has increased from 6 trillion to 10 trillion US dollars, while the issuance prices of Bitcoin, Ethereum, and Ripple in China have all exceeded 100 US dollars. So by comparing the currency and digital tokens of other countries, we can see how the domestic country thinks.

There are two reasons for this:

1. When we compare cash equivalents to gold, our legal tender can buy any kind of goods with it. But this problem is actually very complex because in the current government bond market, US bank deposit interest rates are more than 30 times higher, which is about 60 basis points per year. In addition, if the Federal Reserve does not accept this interest rate payment, it will impact foreign exchange reserves.

2. Currently, the prices of many virtual assets in the market are realized through encryption technology. For example, well-known Litecoin and Tether, these currencies basically have their own unique advantages. For example, the currently popular “XRP” stablecoin, but they cannot be traded like the US dollar, which means their volatility is too high.

3. “XRP”, “Zcash”, “EOS”, “Luna”, these three currencies cannot compete with the Renminbi and are difficult to become international means of circulation, so they can only be used as exchange media. In addition, there is a flaw that their transaction speed is very slow, and some people even convert them into USDT to purchase high-value items, resulting in high commissions charged by exchanges (of course, there are exceptions). Once people discover this situation and quickly adopt corresponding regulatory measures, it is easy to incur losses. So for most investors, it is very easy to choose to use different encrypted assets instead of investing, after all, many people are confused by various altcoins.

4. In addition to the government, many financial institutions have not participated in related business activities because central banks of various countries are studying how to exchange their currencies for overseas customers, so even those who provide services do the same. So any form of money can be used to exchange local currency.

This article and pictures are from the Internet and do not represent aiwaka's position. If you infringe, please contact us to delete:https://www.aiwaka.com/2023/08/20/why-is-the-korean-won-a-large-number-why-is-the-korean-won-not-valuable-like-the-renminbi/

It is strongly recommended that you study, review, analyze and verify the content independently, use the relevant data and content carefully, and bear all risks arising therefrom.

Why is the Korean Won a large number (Why is the Korean Won not valuable like the Renminbi)?

Why is the Korean Won not valuable like the Renminbi?

Recommended articles