What is the impact of exchange rate on virtual currency

1.

1、 Common analysis of virtual currency (1) bitcoin solution is designed and created by Japanese programmer Nakamoto (alias) in 2009, and it is the most successful and controversial network currency at present. Bitcoin scheme is based on P2P network architecture, which has been operating in the world, and can be used for all kinds of virtual and real goods and services transactions

In theory, if the existence of network currency affects the demand for the central bank's liabilities, and then interferes with the central bank's open market operation, it will have an impact on a country's monetary policy and price stability. However, from a practical point of view, the premise of network currency affecting price stability includes the following three aspects:

(1) from the analysis of the impact on the amount of money, although it is difficult to analyze the extent to which the network currency scheme creates money in the case of lack of information

However,
however, most Internet money systems operate in prepaid mode, that is, issuing Internet money when the real money is exchanged in and withdrawing money when the real money is exchanged out. In the famous network currency scheme, the supply of money is stable and the supply is small, but we still need to be vigilant whether it can ensure that the money supply will maintain a stable level in the long run, and the impact of the change of exchange rate between network currency and real currency

(2) from the analysis of the impact on the speed of money circulation, the use of cash and money statistics, the impact of the technological innovation brought by the network currency scheme on the speed of money circulation is not clear

as an Internet instry, it largely depends on the number of active internet currency scheme users. If the network currency is widely accepted, it will have a substitution effect on the real currency of the central bank, thus recing the use of cash in transactions
in this case, the scale of the central bank's balance sheet will be reced, and its ability to influence short-term interest rates will also be weakened. The central bank will need to fight against risks through ways such as setting minimum reserves for cyber currencies. Substitution effect will aggravate the difficulty of monetary statistics and affect the relationship between monetary statistics and inflation, which is not concive to the realization of long-term price stability. In addition, the issuance of network currency outside the central bank and the expansion of virtual credit will have an impact on the central bank's interest rate decision in the economy and weaken the central bank's monetary control

(3) from the analysis of the interaction between network currency and real economy, network currency can act as a real commodity trading medium and have an impact on real GDP

The influence of network money on real money supply depends on two aspects: one is the substitution effect of virtual economy on real economy; the other is the substitution effect of virtual economy on real economy; The second is the crowding out effect of Internet money on real money, that is, with the increase of the total amount of Internet money, the amount of cash held by the public in real life decreases, resulting in the decrease of cash / deposit ratio and the increase of money multiplier. In reality, the network virtual currency scheme will not affect the price stability at this stage, and the money flow speed will not be significantly affected in the short and medium term. However, the interaction between network currency and real economy deserves attention

(2) financial stability risk when the virtual currency scheme operates outside the banking system, the most important factor of financial instability lies in its connection with the real economy, namely exchange rate and exchange market. Obviously, the closed network currency scheme and the one-way flow network currency scheme are not affected, so we should focus on the two-way flow network currency scheme. The value of two-way network currency depends on the level of money supply and demand in the exchange market. A big difference between network currency and real currency is that the network currency scheme is not based on the country or currency region, and the influence of virtual economy intensity, trade or proction capacity on its exchange rate is limited. The price of virtual money and its fluctuation depend on five factors:

(1) money supply and other actions taken by currency issuers. For example: to achieve a fixed or semi fixed exchange rate by intervening in the market

(2) the network currency scheme shows network externality, and its monetary value depends on the number of users and merchants. As the number of consumers and businesses increases, their monetary value will increase accordingly. In addition, the exchange rate of network currency with small transaction volume fluctuates more

(3) the virtual community with clear and transparent policies and advanced security measures is easier to boost confidence and the currency is stronger

(4) the reputation of network currency issuers in fulfilling their commitments. There is no "lender of last resort" in the virtual community, and the trust gained by the issuer is crucial to the exchange rate of internet currency

(5)
speculation on the future value of Internet money and cyber attacks on virtual communities. Due to the immaturity of the system, low trading, speculative activities and network attacks, the two-way network currency scheme is inherently unstable
qualitative. At present, the trading volume of these network currencies is small and the correlation with the real economy is low, so the stability of the financial system will not be affected. However, if Internet money becomes a substitute for traditional money in the future, it will bring instability to the financial system and even distort the relative prices of goods and services. The impact of network currency system on the financial system largely depends on the number of active users and the number of merchants who are willing to accept virtual currency for real transactions. In addition, virtual currency has only exchange value and no use value. Generally, network currency is not based on assets with intrinsic value and is not supported by central bank credit. At present, these network monetary systems are not allowed to lend
or borrow funds, so it can not pose a threat to the stability of the financial system, but we should pay close attention to its development. If there is any change in the future, it will undoubtedly have an impact on the financial system

(3) stability risk of payment system

in a specific virtual community, virtual currency payment activities have evolved into a "real" payment system, facing typical risks related to the payment system: credit risk, liquidity risk, operational risk and legal risk. The nature, scale and ration of these risks are largely determined by the design of the system or the degree of lack of liquidity, so it is difficult for the network virtual currency scheme to avoid or control these risks. According to the core principles of payment system (CP) issued by the bank for International Settlements (BIS), the network virtual currency scheme does not conform to most of the contents of CP, and does not belong to the systemically important payment system. Therefore, it will not cause
or transmit shocks in the global financial system. At present, there is no systematic risk in the network currency system outside these virtual communities

2. Lack of corresponding supervision and protection mechanism

in the real economy, the central bank plays the role of lender of last resort and has no default risk, so it can take actions in the case of payment crisis or unpredictable liquidity shortage to avoid chain reaction. However, in the network virtual currency scheme
it is impossible to use network currency as settlement asset. Because network currency simply depends on the credibility of the issuer, it can not be widely accepted as a means of payment, so network currency can not be regarded as a safe currency. In addition, commercial banks are required to accept prudential supervision, which reces the possibility of default, and the security of money in commercial bank accounts is higher than that of network currency. A fundamental risk of network currency is that the settlement institution of network currency scheme is not subject to any supervision, no institution is responsible for its behavior, and there is no investor / depositor protection mechanism, which causes the user to bear all the risks

(4) risk of absence of supervision generally speaking, supervision lags behind the development of science and technology. The network virtual currency program was established in the late 1990s, but it was not until 2006 that some government agencies in the United States began to analyze these programs. Due to the lack of
supervision and the anonymity, invisibility and difficulty in tracking of its transactions, the network virtual currency scheme is very easy to be used by terrorist activities, fraud, money laundering and other illegal activities. At present, many government departments in many countries are considering whether to recognize or
legalize these virtual schemes and bring them into the scope of supervision, so as to support the innovation of currency and payment forms, protect the rights and interests of consumers and financial stability, and inhibit the use of virtual currency schemes to engage in criminal activities
at present, the uncertainty of the legal status of the virtual currency scheme may also bring challenges to the government authorities

(5) reputation risk of monetary authority the reputation of Monetary Authority (central bank) is the key factor to determine the effectiveness of monetary policy. The public's trust in fiat money is closely related to the image of the central bank, which pays close attention to its reputation. The ECB defines reputation risk as the risk of deterioration of reputation, credit or public image. As the network currency scheme is related to money and payment, it is generally believed that it belongs to the responsibility of the central bank, so we should be alert to the reputation risk it may bring to the central bank. However, in the case of small scale, the impact of the failure of the network currency scheme is limited, but its high volatility and instability also aggravate the possibility of failure and attract extensive media coverage. If the network currency is allowed to develop continuously without
regulation, the central bank may be considered as dereliction of ty and affect its reputation

(6) the risk of investors' loss
for exchange value, the public has a higher recognition of the investment value of network virtual currency, and it is investment based transactions that accelerate the formation of virtual currency market. Like other investment markets, participants in virtual money market will also face potential losses caused by market risk, credit risk and policy risk. Take bitcoin as an example: from 2009 to early 2010, bitcoin was worthless; In the summer of 2010, bitcoin trading began to enter the golden
period. As the supply was far less than the demand, the value of online trading began to rise. In early November, bitcoin was silent at 29 cents for many days, and then jumped to 36 cents; In February 2011, bitcoin continued to appreciate, and its exchange rate with us dollar
reached 1:1; In 2013, the price of bitcoin achieved a "Big Bang" growth, and hit US $1242 on November 29, 2013, surpassing the gold price of US $1241.98/ounce in the same period. Fierce price fluctuations make market participants face huge speculative risks. Unlike mature capital markets such as stocks and bonds, the depth of bitcoin market is insufficient, and it is mainly held in the hands of large investors with low degree of diversification. Bitcoin price is easily affected by large investors' buying and selling behavior, and also easily manipulated by speculators. At the same time, different countries have different attitudes towards bitcoin, Germany, the United States and other countries hold an open and supportive attitude, and Thailand, Brazil and other countries regard bitcoin related activities
as illegal. Every country's attitude and measures will have a significant impact on the price of bitcoin, especially in the short term

virtual currency is always inferior to real currency< br />

2. 1 The impact of exchange rate changes on the balance of import and export trade
exchange rate changes will cause changes in the price of import and export goods, thus affecting a country's import and export trade. The devaluation of a country's currency is concive to increasing exports and restraining imports. On the contrary, if a country's currency appreciation, that is concive to imports, but not concive to exports; The effect of exchange rate change on non trade balance is the same as that on trade balance
(2) the impact of exchange rate changes on domestic price level: first, the impact on the price of trade goods; Second, the impact on the price of non trade goods< (3) the impact of exchange rate changes on international capital flows. The impact of exchange rate changes on capital flow is shown in two aspects: first, after the devaluation of the local currency, the unit foreign currency can be converted into more local currency, which will increase the inflow of foreign capital and rece the outflow of domestic capital; Second, if the external value of the local currency will be depreciated or not, and the foreign exchange rate will rise or not, it will affect people's expectations of the exchange rate, and then lead to domestic capital flight< (4) the impact of exchange rate changes on foreign exchange reserves. The impact of currency devaluation on the scale of a country's foreign exchange reserves; The exchange rate change of reserve currency will affect the real value of a country's foreign exchange reserves; The frequent fluctuation of exchange rate will affect the status of reserve currency< (5) the impact of exchange rate changes on a country's domestic employment, national income and resource allocation. When a country's local currency exchange rate falls and foreign exchange rate rises, it is concive to promoting the country's export growth and restraining imports, which makes its export instry and import substitution instry develop vigorously, thus speeding up the development of the whole national economy, increasing domestic employment opportunities and national income. On the contrary, if a country's currency exchange rate rises, the country's exports will be blocked; If the import increases greatly e to the stimulation of exchange rate, the export instry and import substitution instry will shrink, and the resources will be transferred from the export instry and import substitution instry to other sectors< (6) the impact of exchange rate changes on the world economy. The exchange rate changes of small countries only have a slight impact on the economies of their trading partners, while the exchange rate changes of the freely convertible currencies of developed countries have a relatively large or even huge impact on the international economy.

3.

1. The impact of exchange rate changes on the balance of import and export trade:

exchange rate changes will cause changes in the price of import and export goods, thus affecting a country's import and export trade. The devaluation of a country's currency is concive to increasing exports and restraining imports. On the contrary, if a country's currency appreciation, that is concive to imports, but not concive to exports; The effect of exchange rate change on non trade balance is the same as that on trade balance

Second, the impact of exchange rate changes on domestic price level: first, the impact on the price of trade goods; Second, the impact on the price of non trade goods

The impact of exchange rate change on international capital flow is shown in two aspects: first, after the devaluation of the local currency, the unit foreign currency can be converted into more local currency, which will increase the inflow of foreign capital and rece the outflow of domestic capital; Second, if the external value of the local currency will be depreciated or not, and the foreign exchange rate will rise or not, it will affect people's expectations of the exchange rate, and then lead to domestic capital flight

4. The impact of exchange rate changes on foreign exchange reserves: the impact of currency depreciation on the scale of a country's foreign exchange reserves; The exchange rate change of reserve currency will affect the real value of a country's foreign exchange reserves; The frequent fluctuation of exchange rate will affect the status of reserve currency

The impact of exchange rate changes on a country's domestic employment, national income and resource allocation:

when a country's local currency exchange rate falls and foreign exchange rate rises, it is concive to promoting the country's export growth and restraining imports, which makes its export instry and import substitution instry develop vigorously, thus speeding up the development of the whole national economy and increasing domestic employment opportunities, National income also increased

extended data

exchange rate fluctuation is the two forms of exchange rate change under the floating exchange rate system, in which the exchange rate changes with the change of supply and demand at any time

when the demand for foreign exchange exceeds the supply, the exchange rate will rise from bottom to top, which means that the country's currency will appreciate

when the supply of foreign exchange exceeds the demand, the exchange rate will decrease from the top to the bottom, which means the devaluation of the country's currency. If China's currency continues to rise, it will affect the fluctuation of the exchange rate

4. The change of exchange rate also has an indirect effect on interest rate, that is, it has an indirect effect on interest rate by influencing domestic price level and short-term capital flow
first of all, when a country's currency exchange rate falls, it is concive to promoting exports and restricting imports. The rising cost of imported goods will promote the rise of general price level, which will lead to the rise of domestic price level and the decline of real interest rate. This kind of situation is beneficial to debtors and unfavorable to creditors, resulting in the imbalance between supply and demand of loan capital and eventually the rise of nominal interest rate. If a country's currency exchange rate rises, the impact on interest rates is just the opposite of the above situation
secondly, when the exchange rate of a country's currency falls, people often expect that the exchange rate of the country's currency will fall further under the influence of psychological factors, which will lead to short-term capital flight and the decrease of domestic capital supply will promote the rise of the exchange rate of the country's currency. If there is an expectation that the exchange rate will rebound after the decline of the local currency exchange rate, in this case, there may be an opposite change to the above situation, that is, the increase of short-term capital inflow will increase the domestic capital supply, resulting in the decline of the local currency interest rate
If a country's terms of trade can be improved after the currency exchange rate falls, the improvement of the terms of trade will lead to the increase of foreign exchange reserves. Assuming other conditions remain unchanged, the increase of foreign exchange reserves means the increase of domestic capital supply, which will lead to the decrease of interest rate. On the contrary, if the rise of a country's currency exchange rate will cause the decrease of foreign exchange reserves, it may lead to the decrease of domestic capital supply, and the decrease of capital supply will affect the interest rate and make it rise.

5. This problem is more complicated. In short, because China is currently an export-oriented economy, the increase of RMB exchange rate will inevitably lead to the decline of export competitiveness in the short term. For this reason, the export-oriented procts and instries will be in the doldrums. But for this reason, the state will step up investment in innovative instries and procts, so enterprises with innovative skills and strength in related instries will perform well in the stock market< In addition, macroscopically speaking, if the interest rate (exchange rate) rises in a country, the exchange rate (interest rate) of that country will fall. However, this conclusion does not necessarily hold in any case, but the theory is like this
then the decline of interest rate will further lead to active investment in the stock market, or maintain a bull market.

6. As a manifestation of the external price of a country's currency, the exchange rate is affected by domestic and international factors. At the same time, in addition to economic factors, it is often affected by political and social factors. Therefore, the change of exchange rate is often changeable and difficult to predict accurately. As far as economic factors are concerned, there are mainly:
(1) long term factors
1. Balance of payments, strictly speaking, refers to the income and expenditure in a country's foreign economic activities. When a country's international income is greater than its expenditure, it is the balance of payments surplus; On the contrary, it is a deficit. A country's balance of payments situation will directly affect the supply and demand of the country's foreign exchange market, and then affect the exchange rate changes. Generally speaking, if a country's balance of payments surplus, in the foreign exchange market, the supply of foreign exchange will exceed the demand, the foreign exchange rate will fall, and the local currency exchange rate will rise; If there is a deficit, the supply of foreign exchange exceeds the demand, the exchange rate of foreign exchange rises and the exchange rate of local currency falls. However, the effect of the balance of payments on the exchange rate can only play a role in a long time. The short-term, temporary and small-scale balance of payments on the exchange rate is easily offset by some other factors
2. Relative inflation rate
the external value of money is based on the internal value. If the internal value of a currency decreases, its external value, that is, the exchange rate, will inevitably decrease. The change in the internal value of a country's currency is usually measured by the inflation rate. Inflation and rising prices mean that the purchasing power of the unit currency is reced and the value of the unit currency is reced. Under the circulation of paper money, there are different currency changes in different countries. Therefore, we should not only examine the inflation rate of our own country, but also the inflation rate of other countries, that is, the relative inflation rate. Generally speaking, a country with relatively high inflation rate means that the faster the internal value of its currency falls, the lower its local currency exchange rate will fall, and the higher its foreign exchange rate will rise< In addition to inflation, the macroeconomic situation of a country also includes economic growth, fiscal revenue and expenditure, national income, investment environment, economic openness and many other aspects. If a country's macro-economic situation is good and its economy is stable, the exchange rate of its currency tends to be stable; On the contrary, there will be large fluctuations. Therefore, creating a good macroeconomic environment is an important prerequisite for maintaining exchange rate stability 2 Short term factor 1. Relative interest rate level interest rate is the price of loan funds. Interest rate as the cost of using funds or the income of abandoning the use of funds will also affect the exchange rate level. Generally speaking, funds always flow from low interest rates to high interest rates. When the interest rate of a country is higher than that of other countries, the capital of other countries will flow into the country; Otherwise, when the country's interest rate level is lower than that of other countries, the country's funds will flow out. The inflow and outflow of funds will directly affect a country's foreign exchange supply and demand, especially the supply and demand of short-term foreign exchange, thus causing exchange rate changes. Of course, when analyzing the interest rate factor, we should not only examine the nominal interest rate, but also examine the relative real interest rate level in combination with inflation. The impact of interest rate on the long-term exchange rate is very limited, and to a greater extent, it has a significant impact on the short-term exchange rate as a policy tool< In order to achieve certain economic goals, the government often takes various measures to intervene in the foreign exchange market and foreign exchange rate, and sometimes even manipulates the fluctuation of the exchange rate. In order to avoid the adverse impact of exchange rate changes on the domestic economy, the government needs to buy and sell foreign exchange in the foreign exchange market through the central bank, so that the change of exchange rate is concive to the operation of the domestic economy. There are three purposes of this kind of intervention: one is to ease the exchange rate when it changes too violently; the other is to stabilize the exchange rate at a certain level; the third is to make the exchange rate rise or fall to a certain level
3. Psychological expectation
psychological expectation sometimes has a significant impact on the exchange rate. Psychological expectations are multifaceted, including not only the economic aspects such as interest rate changes, exchange rate trends, inflation and balance of payments, but also the political and social aspects such as political situation, international relations and social stability. Different expectations of these aspects will directly change people's economic behavior, such as the direction of investment and savings, and then affect the exchange rate. Due to the rapid change and great influence of psychological expectation, it often causes short-term exchange rate fluctuations. Sometimes, psychological expectation even becomes the most important factor affecting the exchange rate in the market.

7.

1. The impact of exchange rate changes on foreign exchange reserves

the impact of currency depreciation on the scale of a country's foreign exchange reserves; The exchange rate change of reserve currency will affect the real value of a country's foreign exchange reserves

The impact of exchange rate changes on a country's domestic employment, national income and resource allocation

when a country's local currency exchange rate falls and foreign exchange rate rises, it is concive to promoting the country's export growth and restraining imports, which makes its export instry and import substitution instry develop vigorously, thus speeding up the development of the whole national economy, increasing domestic employment opportunities and national income

3. The impact of exchange rate changes on the world economy. The exchange rate changes of small countries only have a slight impact on the economies of their trading partners, while the exchange rate changes of the freely convertible currencies of developed countries have a relatively large or even huge impact on the international economy

(1) according to the evolution of the international monetary system, there are fixed exchange rate and floating exchange rate

Fixed exchange rate. It refers to the exchange rate set and announced by the government and can only fluctuate within a certain range

Floating exchange rate. It refers to the exchange rate determined by market supply and demand. In principle, a country's currency market has no obligation to maintain the exchange rate level, but it can intervene when necessary

8. According to your request, for example:

for convenience, if RMB: USD = 8:1 (both import and export use USD)

then you import RMB 8 million goods and use USD 1 million

and if RMB appreciation is RMB: USD = 7:1, you import the same goods with USD 1 million, You only use RMB 7 million.

the difference between before and after is RMB 1 million.

export is the other way around, and the truth is the same.

it can't be said that the purchasing power is strong. It can be said that when the value rises, the import will earn more than usual

9. The issue of RMB appreciation is indeed a complex and realistic one, which is a double-edged sword. Only when we judge the situation and grasp the advantages and disadvantages, can we deal with it reasonably, forcefully and orderly. The positive effect of RMB's moderate appreciation is that it is concive to the reform of the exchange rate system and even the financial system. On July 21, 2005, the people's Bank of China announced the implementation of a managed floating exchange rate system based on market supply and demand with reference to a package of currencies. It is more flexible and consistent with the direction of reform
it is helpful to solve the imbalance of foreign trade. As a result of the implementation of a single exchange rate system pegged to the US dollar, Chinese procts have always maintained the "cheap" advantage. Within the range that most domestic enterprises can bear, the moderate and small appreciation of RMB indicates that China does not hesitate to sacrifice its own interests for the sake of its trading partners, so as to alleviate the imbalance of international payments to a certain extent
it is beneficial to rece the price of imported goods and the proction cost of export enterprises which mainly import raw materials. Appreciation can rece the domestic price of some imported goods and benefit domestic consumers. At the same time, many export enterprises are actually "two ends out" enterprises, and most of the raw materials for export procts come from abroad. After the appreciation of RMB, enterprises can pay less RMB for importing the same dollar unit of goods, which actually reces the cost of proction
it is concive to recing the cost of outbound tourism for Chinese citizens and promoting more citizens to go abroad. In recent years, more and more compatriots go abroad to see the world. Chinese people have a habit of going abroad, which is to convert the commodity price into RMB to see if it is worth it. The result is that it is too worthless. The moderate appreciation of RMB means that the money in our hands will be more valuable
it is concive to promote domestic enterprises to strive to improve the competitiveness of their procts. Our enterprises' long-term practice of occupying the international market with low prices is actually the result of self bargaining competition, recing their own profits and benefiting foreign importers. If the price is raised after appreciation, the market may be lost; If the price is not raised, the loss may be increased. Therefore, we can only improve proctivity and technology content, rece costs, improve quality and enhance competitiveness
is concive to recing the demand of foreign capital for domestic purchase and recing the real estate bubble. Appreciation has raised the cost of buying foreign capital in Chinese mainland. If the external demand decreases, it will undoubtedly ease the so-called short supply situation, cool the domestic real estate market, and have a positive effect on recing house prices
this will lead to an increase in the cost of overseas tourists in mainland China, and a decrease in tourists and foreign exchange earnings. Tourists either have to spend more or lower their consumption standards ring the tour, which may make them switch to other countries or regions
the excessive appreciation of RMB does not only have a negative impact on China. With the increase of international economic exchanges and dependence, both positive and negative effects are two-way. Turbulence on one side will also lead to instability on the other side, especially when one side of the trade relies on the other side to a certain extent. Therefore, if the export of domestic enterprises and instries decreases e to appreciation, it is difficult to guarantee that our trading partners will remain intact. The direct consequence of the excessive pressure of appreciation is that many people in many European and American countries can not enjoy Chinese procts with high quality and low price. Whether we switch to domestic procts or use substitutes from other countries, it may lead to the rise of domestic prices, the increase of consumer spending and the decline of real living standards.