When will bitcoin be recognized in China
although bitcoin still has great risks, after years of development, with the increase of its application population, application scenarios and application technology, no country or organization can completely eliminate it. If you can figure it out, it is likely that countries will generally accept bitcoin and embrace it
according to my personal judgment, bitcoin, after a period of continuous development, is likely to become a world currency in the future, which can play the role of electronic gold and become the target of the value of other sovereign currencies. From this perspective, bitcoin can be used as a means of asset preservation in the future when inflation is inevitable
On the afternoon of December 5, 2013, the people's Bank of China issued the notice on preventing bitcoin risks. In the notice, the people's Bank of China said that bitcoin is not a currency, but a virtual commodity. Financial institutions and Payment institutions are not allowed to carry out business related to bitcoin. As soon as the notice was issued, bitcoin fell sharply on China's trading platform, and it has dropped by 60% in three weeks. This is the beginning of bitcoin being restricted by the Central Bank of China. In mid March 2014, the people's Bank of China issued a notice on further strengthening bitcoin risk prevention to all branches of the people's Bank of China, which required all banks and third-party payment institutions to close the trading accounts of 15 domestic bitcoin platforms before April 15. This shows that it is illegal for financial institutions in China to open trading accounts for bitcoin website platforms. Except for cash transactions, bitcoin investors can not conct bank transfer and third-party payment for transactions in China< br />
before the advent of bitcoin, all payment systems were based on central authorities (such as banks, payment services, etc.), and customers opened accounts and operated. Therefore, with the permission of the bank, the transaction can be completed through "confirmation", "guarantee" and "execution". At the same time, users need to be completely dependent on banks and other top institutions. Money in the banking system can be monitored, frozen, seized, and cut by inflation
bitcoin system is different. Bitcoin technology enables users not to rely on the guarantee of a third party - all transactions are checked and authenticated by the bitcoin decentralized network, and its functions are also distributed, just like torrent network. Bitcoin system does not belong to anyone, its users are equal, the program source code is open and anyone can view, so as to ensure independence, fairness and security. To create an account and start using bitcoin, users don't have to show their identity or get approval - just connect to the network and install the program wallet. At the same time, all transactions can be carried out directly without freezing. Bitcoin can not only be converted into national currency, but also be used directly in some stores
the independence of bitcoin eliminates the external influence on the network, which is the key advantage compared with the banking system. The timetable of the new bitcoin derived from the algorithm has planned the issuance of the next few decades, directly excluding the uncontrollable inflation in fiat money. No intermediary means no transaction fees or very little. The continuous operation of the network can ensure that users can automatically remit any amount of money in 10 minutes anywhere - without intermediary, restriction and risk. Not long ago, it was hard for people to imagine, but now as long as they can access the network, all this can become a reality.
1. Cash ratio:
cash ratio refers to the ratio of cash in circulation to current deposits of commercial banks. The cash ratio is positively related to the money demand. Therefore, all factors affecting money demand can affect the cash ratio
2. Excess reserve ratio:
the ratio of the reserve held by commercial banks in excess of the statutory reserve to the total amount of deposits is called excess reserve ratio. Obviously, the existence of excess reserve reces the ability of banks to create derivative deposits. Therefore, the relationship between excess reserve ratio and monetary multiplier also changes in the opposite direction. The higher the excess reserve ratio is, the smaller the monetary multiplier is; On the contrary, the greater the money multiplier
The ratio between time deposit and current deposit:the legal reserve ratio of time deposit and current deposit is directly determined by the central bank. Generally, the higher the legal reserve ratio is, the smaller the monetary multiplier is; On the contrary, the greater the monetary multiplier
Due to the fact that the derivative ability of time deposits is higher than that of current deposits, central banks of all countries have different statutory reserve ratios for different types of deposits of commercial banks, and the statutory reserve ratio of time deposits is usually lower than that of current deposits. When the legal reserve ratio remains unchanged, the change of the ratio between time deposit and current deposit will also cause the change of the actual average legal reserve ratio, which will eventually affect the size of the monetary multipliergenerally speaking, when other factors remain unchanged, the ratio of time deposit to current deposit increases and the monetary multiplier increases; On the contrary, the money multiplier will decrease. In short, the size of money multiplier is mainly determined by the legal deposit reserve ratio, excess reserve ratio, cash ratio and the ratio between time deposit and current deposit
source: Internet money multiplier