How to understand digital currency? What is Digital Currency? How do you understand that?

1 minute to explain the relationship between monetary policy and us, the significance of digital currency.

What is Digital Currency?

The central bank's digital currency, known as DCEP, is issued by the People's Bank of China and is a legal tender with national credit endorsement and legal solvency, which is equivalent to the renminbi and has the highest effectiveness and security. The central bank does not issue digital currency directly to users, but exchanges digital currency to commercial banks, and commercial banks exchange them for users.

Ordinary users only need to install an e-wallet on their mobile phones and deposit DCEP into an e-wallet to use it, and they can use it without a bank account.

Two mobile phones with e-wallets can transfer DCEP. It's like using cash, I give you a hundred dollars, and you get a hundred dollars, and you don't need to be connected to the Internet. Digital currencies (DCEP) can also be bilaterally offline.

This means that the digital currency is bound to the device, and if the mobile phone is lost, the digital currency will be lost, just like the wallet is lost, and the cash in it is gone.

Essential differences. There is no need for the participation of a third-party payment institution, and the transfer from one person directly to another transfers the physical ownership of the currency is transferred, and there is no credit risk and other problems such as cashing.

1. Digital currency is abbreviated as digiccy, which is the abbreviation of "digital currency" in English, and is an alternative currency in the form of electronic currency. In both digital coins and cryptocurrency, the touch of a button belongs to digital currency (digiccy).

2. Digital currency is an unregulated, digital currency that is usually issued and managed by developers and is accepted and used by members of a specific virtual community. The European Banking Authority defines virtual currency as a digital representation of value that is not issued by a central bank or authority and is not pegged to fiat currency, but because it is accepted by the public, it can be used as a means of payment, or it can be transferred, stored or traded electronically.

I don't know much about digital currencies, but I know that investing in digital scum currencies will make people lose a certain amount of money, and it is also very unstable.

I don't know a lot, and this is also a kind of virtual goods or Hu coins, and the enthusiasm of consumers is also relatively high, such as bitcoin and dogecoin, but the risk is also relatively large.

I know a lot about digital currencies, which are often referred to as virtual currencies and are not allowed to be traded in many countries.

Digital currency is an alternative currency in the form of electronic money, which is a legal tender and must be issued by a **bank. Digital coins and cryptocurrencies are both digital currencies, it is not a network virtual currency, because it is not limited to the virtual space, but is often used for real goods and services transactions, such as Bitcoin, Litecoin, Bitcoin shares, etc., there are currently thousands of digital currencies issued around the world.

Expansion of the bridge in the material:1. Impact on financial infrastructure.

The decentralized mechanism of value exchange based on distributed ledger technology has changed the basic setup of aggregate and netting on which financial market infrastructures depend. The use of distributed ledgers can also create challenges for trading, clearing and settlement, as it facilitates the disintermediation of traditional service providers** in different markets and infrastructures. These changes may have a potential impact on market infrastructures outside of retail payment systems, such as high-value payment systems, settlement systems, or transaction databases.

2. Impact on financial intermediation and financial markets in general.

Digital currencies and technologies based on distributed ledgers, if widely used, will pose a challenge to the intermediary role of current participants in the financial system, especially banks. Banks are financial intermediaries that perform the duties of the first supervisor and supervise borrowers on behalf of depositors. Typically, banks also carry out liquidity and maturity conversion to facilitate the financing of funds from depositors to borrowers.

If digital currencies and distributed ledgers are widely used, any subsequent disintermediation could have an impact on savings or credit assessment mechanisms.

The digital currency issued by the central bank is a legal tender in the form of a string of encrypted numbers that represents a specific amount. It is not a physical entity per se, nor does it use a physical entity as a carrier, but is used for network investment, trading, and storage, representing a certain amount of digital information.

To put it simply, digital currencies are similar to traditional currencies and can be used to purchase physical goods and services.

The development of digital currency

The research and development of digital currency was actually proposed as early as 2014.

In 2017, the blockchain-based digital bill trading platform promoted by the People's Bank of China has been successfully tested, the national legal tender digital currency issued by the People's Bank of China has also been put into trial operation on the platform, and the digital currency research institute under the People's Bank of China has also been officially listed.

In the just-concluded two sessions, digital currency has become a high-frequency word in the work reports of various localities. Including "Shanghai, Guangdong, Suzhou" and other places, they have "officially announced" that they will build digital currency innovation pilot zones and promote the pilot of digital yuan.

Impact on the bill business

The advantages of large-amount settlement are very obvious

If digital currency is used to replace paper money, interbank large-value settlement and bill business can combine bookkeeping and clearing into one. The time lag between bookkeeping and clearing and the lack of information can easily create opportunities for financial criminals, and the use of digital currencies can greatly reduce this risk.

In recent years, bills have been electronic, and after the combination of electronic bills and digital currency, it is believed that the financing process will become more convenient and fast, the business process will be simplified from complex, the whole process will become clearer and more transparent, and the security of the bill market will also be improved.

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