Today, LTG GOLDROCK will talk to you in detail what are the characteristics of foreign exchange ~
Foreign exchange refers to assets represented by foreign currencies and can be used to liquidate international revenue and expenditure.Foreign currency widely used in international settlement payment and circulation means internationally is a truly foreign exchange, and not all foreign currencies can become foreign exchange.The currency of a country must be widely used and accepted and became general foreign exchange internationally, and must have the following characteristics:
Foreign currency.Foreign currency, that is, foreign exchange must be overseas currencies instead of currencies at home.For example, British residents cannot use the pound as foreign exchange, but the pound is foreign exchange for residents of other countries.
Can be freely converted.Foreign exchange can freely exchange cost coins or currencies in other countries. This feature allows the purchasing power of foreign exchange to transfer internationally and achieve the function of payment methods, so that international debt and debt can be settled.
General acceptance.General acceptance is that foreign exchange is widely accepted and used by countries in international economic exchanges. This feature determines that a currency must be used internationally, and it must be used internationally, and the premise of being accepted by the people of another country.
Compensation.The replacement is that the assets represented by foreign exchange must be the monetary debt that can be paid abroad.For example, the bank's refusal to pay the bills issued by the issuer cannot achieve international exchange, and the debt of the currency cannot be settled.Therefore, if foreign exchange or foreign exchange assets cannot guarantee repayment abroad, it is not foreign exchange.