What is the currency level of digital currency
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this division of cognition not only helps us understand digital currency, but also guides our behavior in the process of investment. So I'm going to analyze this topic in two or three articles
from the perspective of cognition, I divide all digital currencies into the following three categories:
the first category is that their value and consensus have been strongly recognized, almost indisputable, and have been transmitted from within the circle to outside the circle. This kind of currency is the least in the whole field of digital currency
this kind of currency typically includes bitcoin and Taiwan dollar. Bitcoin is recognized as "digital gold" and has repeatedly shown the characteristics of "sea calming needle" when the external political and economic environment is unstable; The profit model of platform currency is clear, especially the top three platform currencies have solid cash flow and income relying on the exchange
when talking about this kind of currency, both their consensus and value are highly recognized in the instry, and ordinary people can understand it outside the instry
when we talk about bitcoin with ordinary people, as long as we tell them that gold goes up, bitcoin goes up; When talking about platform currency with ordinary people, just tell them that platform currency is equivalent to the stock of securities companies, and they will immediately understand what we are talking about
although some people outside the instry do not agree with some consensus (for example, some people still do not agree with the value of bitcoin), this does not prevent ordinary people from understanding what we are talking about
the second type is that consensus has been reached, but the actual use value is still being proved, or the so-called "use value" can not show us the actual effect for the time being. This kind of currency is slightly more than the first kind, but also very few in the whole field of digital currency
this kind of currency typically includes Ethereum, EOS and cross chain projects in the field of smart contract
take Ethereum and EOS for example, they are highly expected by the instry. We hope to see that their smart contract function can proce killer applications and bring higher efficiency and lower cost to our daily life
in the past two years, Ethereum has developed a highly concerned defi Ecology (defi, decentralized finance, often referred to as distributed finance or decentralized Finance) in the instry
however, does this ecology have a direct relationship with the life of ordinary people or bring direct benefits? In fact, it does not exist at all. It is still a "niche ecology" in a small circle, far away from our daily life
the ecosystem developed by EOS in the past two years is far from the areas where we expect to bring value into play, and even there are not many people in the instry who pay attention to it
the concept of cross chain project is very novel when it first came out, and it is also considered by the instry to have great potential demand. But after a period of discussion, some people began to question whether this demand really exists
the instry has a consensus, or even a high consensus, on these currencies, but their current value is not satisfactory. Therefore, even if they are recognized by the instry, it is difficult for this consensus to be transmitted outside the instry, not to mention that ordinary people can understand these consensus and values
so we can't talk with ordinary people about what "defi" and "cross chain" are and what's the use
the third category is the currency whose consensus is still in the process of forming. The design objectives and scenarios of this kind of currency may not be understood or recognized by the instry, or even there are great differences in understanding. Their value is even more difficult to judge. This kind of currency accounts for the vast majority of the current market.
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the main basis for dividing monetary levels is the liquidity of financial assets
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financial assets with different degrees of liquidity have different degrees of convenience in circulation, and thus have different degrees of influence on commodity circulation and various economic activities
Therefore, it is of great significance to divide different levels of currencies with different forms and characteristics according to liquidity strength, scientifically analyze currency circulation, correctly formulate and implement monetary policy, and timely and effectively carry out macro-control{rrrrrrr}
extended data
political economy analysis of monetary level
in the Interim Measures for statistics and publication of money supply of the people's Bank of China issued on December 28, 1994, according to the actual situation at that time, China's money supply was divided into M0, M1, M2 and M3 levels, The contents of each level are as follows:
M0 = cash in circulation
M1 = M0 + unit current deposit + indivial credit card deposit
M2 = M1 + household savings deposit (including current deposit and time deposit) + unit time deposit + other deposits
m3 = M2 + financial bond + commercial paper + large amount transferable time deposit certificate, etc.
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money supply The central bank can adjust the credit supply and interest rate through the management of money supply, so as to affect the money demand and make it consistent with the money supply, so as to further affect the level of macroeconomic activities
China's monetary level is divided into three levels:
1. M0 = cash in circulation
2. M1 = M0 + current deposit of enterprise unit + rural deposit + partial deposit of institutions and groups
3. M2 = M1 + fixed deposit of enterprise unit + self raised capital construction deposit + personal savings deposit + other deposits
among them, should M1 add credit card deposit, Whether short-term credit instruments such as foreign currency deposits and bank acceptance bills should be listed in m2 or m3 separately needs further study
The standard of currency level division
as for the currency level division, each country has its own standard, and even the method of currency level division of the same country in different periods may be different
The basic idea is divided according to the liquidity of money In the eyes of most western economists, the liquidity of money is essentially the liquidity of money. According to most western economists' inction of monetary levels, money can be generally divided into the following levels:M1 = Cash + current deposit
M2 = M1 + savings deposit in bank + fixed deposit in bank
m3 = M2 + deposits of various non bank financial institutions
M4 = m3 + all short-term financial instruments other than financial institutions
2, U.S. division of monetary level
at present, the U.S. division of monetary level is roughly as follows: M1 = currency + current deposit + other checking deposit
M2 = M1 + small fixed deposit + savings deposit + money market deposit account + money market fund share (non institution owned) + every other day repurchase agreement + every other day Eurodollar + merger adjustment
m3 = M2 + large denomination time deposit + money market fund share (institution owned) + time repurchase agreement time Eurodollar + consolidation adjustment; L = m3 + short term Treasury securities + commercial paper + savings bond + bank acceptance note
3, China's currency division is based on
at present, the academic circles are not unified about the division of the level of money quantity in China, some advocate the division according to the speed of money turnover, some advocate the division according to the level of currency liquidity, and some advocate the division according to the level of currency liquidity. If divided by liquidity, the basis is as follows:
(1) it is relatively more accurate to grasp the differences in the circulation characteristics or activity degree of various specific forms of money in the field of circulation
(2) on the basis of grasping the liquidity, we should grasp the liquidity cost, the stability and predictability of its own price
(3) on the basis of analyzing the dynamic changes of economy, the central bank should strengthen the control ability of a certain level of currency In the third quarter of 1994, the people's Bank of China officially determined and published the money supply index quarterly. According to the actual situation at that time, the division of money level is as follows:M0 = cash in circulation
M1 = M0 + enterprise current deposit + organ, group, army deposit + rural deposit + personal credit card deposit
M2 = M1 + savings deposits of urban and rural residents + fixed deposits in enterprise deposits + trust deposits + other deposits
m3 = M2 + financial bond + commercial paper + large amount transferable certificate of deposit, etc
In China, M1 is the narrow money supply, M2 is the broad money supply, and M3 is added for financial innovation. Back to the standard of liquidity, the liquidity standard of China's monetary hierarchy is limited to the domestic liquidity of the financial assets The central bank can control the money market by increasing or recing the money supply, so as to achieve economic intervention. The change of money supply will affect the interest rate. The central bank can adjust the credit supply and interest rate through the management of money supply, so as to affect the money demand and make it consistent with the money supply, so as to further affect the level of macroeconomic activities Second, it is concive to the formulation and implementation of monetary policy Third, objectively promote the financial innovation of financial institutions2. In the modern developed commodity economy, the scope of money circulation is constantly expanding, and the forms of money in circulation are diversified. In addition to cash and bank deposits, time deposits, State bonds, certificates of deposit and life insurance policies are also widely considered to have monetary nature. In order to predict and organize the purchasing power of money in the whole society and stabilize the circulation of money, we must divide the levels of money according to the liquidity. Otherwise, it will easily lead to market chaos
note: different countries have different ways of dividing currency levels, depending on their own situation. But in theory and practice, the following basic principles have been formed: according to the liquidity of money, the time and cost of converting deposits and other credit instruments into cash are taken as the standard. The shorter the conversion time and the lower the cost, the higher the monetary level.
M0 = cash in circulation
M1 = M0 + enterprise current deposit + organ, group, army deposit + rural deposit + personal credit card deposit
M2 = M1 + savings deposits of urban and rural residents + fixed deposits in enterprise deposits + trust deposits + other deposits
m3 = M2 + financial bond + commercial paper + large amount transferable certificate of deposit, etc
in China, M1 is the narrow money supply, M2 is the broad money supply, and M3 is added for financial innovation
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