Why can’t digital currency be exchanged for gold (Why is digital currency banned)?
Why can\’t digital currency be exchanged for gold? According to CCN news, why ca
Why can’t digital currency be exchanged for gold? According to CCN news, why can’t digital currency be exchanged for gold? The value of virtual currencies like Bitcoin and Ethereum is the same.
The reason why digital currency is accepted by people is because it is essentially a type of encrypted asset that can be used as collateral in investment portfolios for trading or hedging risks. Therefore, if a digital currency is able to generate enough returns to a certain extent, it has the function of being a “safe haven”: it not only functions as a medium of exchange, but also has various functions that can be used for buying and selling, all of which are fundamentally different from traditional banking operations. When a financial product wants to become another payment tool, it must use corresponding technological means to connect the buyer and the service provider together. In addition, due to the maturity of blockchain technology and its decentralized characteristics, the usage scenarios of digital currencies are becoming more and more extensive, which may still cause some confusion for ordinary consumers.
However, digital currencies are not true substitutes and do not need to rely on traditional card, electronic cash systems, or other forms of technology, so they cannot be regulated by regulatory authorities like legal currencies. Because at any time, as long as there is a stable and reliable investment environment with low price fluctuations or a good credit basis, they can meet the needs of investors well, not just for speculation.
Why is digital currency banned
According to cryptonews, since March of this year, the central bank, the China Banking and Insurance Regulatory Commission, and the China Securities Regulatory Commission jointly released the “Announcement on the Prevention of Risks Associated with Token Issuance and Financing,” announcing the cleaning up and regulation of digital currency “mining” activities and restricting transactions. At the same time, it also clearly establishes rules that equate virtual currencies with legal currencies.
For digital encrypted currencies like Bitcoin, our laws and regulations do not prohibit them from being regulated as payment methods; however, it appears that countries around the world have started to establish their own digital currency exchanges or wallets, acting as custodians and providing services for them. “Because we have a fiat currency deposit channel, many customers buy digital currencies through bank transfers.”
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