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Why can’t digital currencies buy gold and foreign currencies (Why can’t digital currencies be withdrawn)

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Why can\’t digital currencies buy gold and foreign currencies? Why can\’t digital

Why cant digital currencies buy gold and foreign currencies (Why cant digital currencies be withdrawn)

Why can’t digital currencies buy gold and foreign currencies? Why can’t digital currencies buy gold and foreign currencies?

In financial transactions, when you use Bitcoin for exchange, there will be a price fluctuation. And if you transfer your assets from the exchange to a wallet, there is a risk of “theft”.

For example, we can use cash to purchase physical items such as gold bars or paper; or you can buy and sell cryptocurrencies (such as the US dollar) in other ways, and then exchange them through these assets. This creates a new means of value storage called “fiat currency”. This is a new technological form used to solve the lack of liquidity in the spot market and to avoid the inefficiency of traditional markets. Because there are now more than 2,000 different currencies worldwide, and it takes a lot of funds to maintain the operation of issuing a basket of stable coins every 10 countries.

So one popular saying we often hear is “why digital currencies can buy gold and foreign exchange”, which is called “digital currency” by people.

In fact, this term originated from a study in a report called “2019 Global Investment Portfolio Management White Paper” recently released by the US Securities and Exchange Commission (SEC): Digital currency constitutes a major economic threat to investors, but it is not a good thing for the general public. Digital currency itself has no intrinsic value, and it also has high speculative and uncertain characteristics. Therefore, there are some technical deficiencies and shortcomings in the promotion process of digital RMB:

1. Because digital RMB adopts an electronic ledger system based on blockchain technology;

2. Digital RMB cannot achieve cross-border remittances, settlements, and clearing like traditional payment systems, but it can provide more secure account services;

3. Digital RMB can only be used for purposes other than legal digital currencies, such as credit limits provided to banks, government departments, enterprises, and individuals;

4. Many countries have clearly stated that they will support central bank digital currencies as the base currency of their international settlement network;

5. “Digital RMB is anchored at 1:1 with the fiat currency and is fully controlled by the central entity”;

6. According to the requirements of Chinese law, all users must hold relevant electronic bills and electronic vouchers to complete business operations, otherwise they will face huge fines and losses;

7. Although most people believe that digital RMB exists to evade regulation, it may also violate relevant regulations and rules on anti-money laundering in certain aspects. Therefore, in this case, we should pay attention to the following issues: 1. How to judge whether you have legal digital currencies.

2: “What is real virtual currency?”

3. “Digital Identity Verification” (DIDs/EDIDs), which means that all data we usually see can be proven to be true and credible information, and behind them correspond to ownership information of a specific address.

Why can’t digital currencies be withdrawn

Why can’t digital currencies be withdrawn?

In our country’s laws, it is prohibited to provide recharge and withdrawal functions of encrypted assets such as Bitcoin to anyone. Therefore, when using digital RMB, you must be extra careful and do not transfer or exchange the digital currency in your digital wallet for legal digital currencies (such as RMB), virtual currencies, or other forms of tokens.

However, some users do not agree with this. Because digital currencies are virtual commodities with large price fluctuations. If abnormal situations occur, they need to be handled through third-party service providers. And because digital currencies have anonymity and are easily attacked by hackers, when we use our mobile phones to buy digital currencies linked to them, we should immediately store them offline in advance; in addition, digital currencies have transaction risks that may result in the inability to withdraw.

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