ECB virtual currency

1.

According to the definition of the European Central Bank in 2012, "a kind of digital currency that is not legally binding, issued and controlled by developers, and accepted and used in specific virtual community members."

at the 2013 congressional hearing, Federal Reserve Chairman Ben Bernanke said that "in the past two decades, virtual currency has been regarded as an electronic currency, or a payment system technology field that has been developing."< In 2013, the financial crime enforcement network (FinCEN) of the U.S. Department of the Treasury defined it as: "virtual currency is a medium of exchange that operates like real currency in some environments, but it does not have all the attributes of real currency." It also has no legal tender status. In 2014, the European Banking authority defined it as "a digital form of value that is not issued by central banks or government departments and is not necessarily associated with legal tender, but it is accepted by natural and legal persons as a means of payment and can be transferred, stored and traded electronically

in Chinese mainland refers to the currency that runs on the Internet, and the famous virtual currency, such as Tencent Inc's Q coins and the grand company's roll, also has virtual currency in online games. Virtual currency is usually used for users to purchase virtual services on the network, such as QQ membership function of Tencent's QQ coin, online game equipment, etc. Virtual currency is usually a means of payment. For example, the Ministry of culture of the people's Republic of China defined it in 2009 as a virtual exchange tool that is issued by online game operators, directly or indirectly purchased by game users using legal tender in a certain proportion, existing outside game programs, stored in servers provided by online game operators in the form of electromagnetic records, and expressed in specific digital units

data source: virtual current from Wikipedia

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3. In fact, this substitution is not a complete substitution, as the words seem to understand. This is a headline written by some media in order to attract attention. The accurate information should be: on June 19, 2017, the European central bank officially announced at 11 a.m. that it had converted 500 million euros worth of foreign exchange reserves from US dollars to RMB. Only part of the foreign exchange reserves will be converted from US dollars to RMB. At present, the European Central Bank has about US $76 billion in foreign exchange reserves.

4.

This is an important signal that Europe can not resist the huge wave of China and the rising of RMB

The specific impacts are as follows:

1. the increase of RMB reserves by the European Central Bank is a further confirmation of the IMF's inclusion of RMB as the official reserve currency

2. with the improvement of China's economic status in the world, the interest and acceptance of RMB will graally increase

3. the increase of the ECB's holding of RMB not only shows the importance of China as one of Europe's largest trading partners, but also shows that the ECB's confidence in China's economic trend and the prospect of RMB is further enhanced

5. after the international financial crisis, with the rapid rise of China's economic status in the world, RMB has really started the process of internationalization

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what has RMB experienced in recent years

1. have the courage to set up pilot projects. In 2009, China carried out the pilot of RMB settlement in cross-border trade in Shanghai and other places, making a key step in the internationalization of RMB

   The RMB exchange rate has developed rapidly. The pace of RMB internationalization in 2009 was much faster than expected, but it slowed down in 2016 e to the fluctuation of RMB exchange rate. Since the beginning of this year, the RMB exchange rate has stabilized, and foreign exchange reserves have rebounded for months

2. two way fluctuation of RMB exchange rate. In the past, the internationalization of RMB was promoted rapidly, which was driven by the expectation of unilateral appreciation of RMB. From the historical experience of major international currencies, the two-way fluctuation of exchange rate is normal. Now the RMB exchange rate has been basically stable, and the market has graally adapted to the two-way fluctuation of RMB exchange rate, so the process of RMB internationalization is more sustainable

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the increase of the ECB's holding of RMB shows that China is becoming stronger and stronger, "if the economy is strong, then the currency is strong."

5.

The European Central Bank recently announced that in the first half of this year, it will increase the RMB foreign exchange reserves equivalent to 500 million euros by selling US dollars. This is the first time that the European Central Bank has included RMB in its foreign exchange reserves, reflecting its confidence in China's economy

the inclusion of RMB in foreign exchange reserves also reflects the European Central Bank's confidence in China's economic transformation and upgrading and maintaining growth

European Central Bank President Mario Draghi pointed out in April that China's economic situation is improving. European central bank executive committee member Kohl said in a recent media interview that China is the main region of interest to the European Central Bank. The Chinese government has the ability to guide the economic transformation well and bring stability to the world economy. "I have no worries or risks."

Kohl said that although China still faces a series of long-term challenges such as shadow banking, corporate debt, domestic demand driven and low-carbon economic transformation, so far, the Chinese government has successfully guided economic development

Wu Sihai, head of Global Markets Department of Bank of China Frankfurt Branch, said that recently, with China's regulatory authorities graally liberalizing foreign central banks to invest RMB funds in domestic bond market, foreign central banks will be more interested in allocating more RMB assets. With the stabilization and rebound of RMB exchange rate against US dollar, the expectation of market bearish RMB exchange rate has been reversed. It is expected that more and more central banks of countries and regions will take RMB as reserve assets, the proportion of RMB in the global foreign exchange reserves will be graally increased, and the process of RMB internationalization will be steadily promoted

6. The behavior of the European Central Bank to charge short-term money market organizations is to charge long-term development interest.

7. The euro is managed by the European system of central banks (ESCB), which is composed of the European Central Bank (ECB) and the central banks of the euro area countries. The European Central Bank, headquartered in Frankfurt, Germany, has the power to formulate monetary policy independently. The central banks of euro zone countries participate in the printing, casting and issuing of euro notes and euro coins, and are responsible for the operation of the euro zone payment system. The mechanism of money supply is as follows:
the euro area stipulates the method and standard of money supply in the form of common treaty, including three indicators: inflation, employment rate and economic growth rate. If these three indicators are within the preset range, money can be put into the market to provide liquidity. If the inflation rate is higher than the preset range, we will implement the tightening policy; If the economic growth rate is lower than the preset range, the expansion policy will be implemented to increase the money supply. Among the three indicators, the inflation rate is the most concerned by the European Central Bank. Its monetary policy strategy is "the medium-term inflation rate is lower than, but close to 2%". There are three monetary policy tools for the European Central Bank to regulate the market: open market operation, loans to banks and deposit reserve ratio.

8. This won't, the European central bank only uses RMB as a storage currency, not to replace the US dollar! It's just that the status of RMB is equal to that of US dollar!

9. Which is so fast, the transformation process has time, but the news is true

10. The statement said the total size of the ECB's foreign exchange reserves remained unchanged as it sold other foreign exchange reserves, including some US dollars, to buy the equivalent of RMB. The ECB's foreign exchange reserves consist of US dollars, Japanese yen, RMB, gold and special drawing rights.