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Digital Currency.edited

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DIGITAL CURRENCY 1
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DIGITAL CURRENCY 2
Introduction
Digital currency refers to the electronic transmission of money using only the digital forms
using technologies such as smartphones, credit cards, and the online exchanges of
cryptocurrencies. There has being a lot of technological developments leading to an increase in the
use of the internet. People have been using an interest in carrying out their business transactions
using e-commerce applications. The traditional use of cash payments is not likely to compete with
the electronic commerce market. The digital currency has made life to become so easy since the
transactions overthrow digital currency are quick and they are completed by just clicking the
phone. According to (Kumar et al., 2011), the introduction of cryptographic technology has led to
peer to peer transaction leading to the decentralization of virtual money. The ordinary information
is being secured using the passwords preventing frauds. The digital currency is transferred to
another person without the use of financial institutions of the intermediary agents. The digital
currency had become famous after the publishing of the Bitcoin white paper which involved the
peer-to-peer electronic cash systems. Bitcoin had three main parts which bare miner, blockchain,
and wallet. Bitcoin uses a combination of blockchain technology and distributed ledger
technology (Skeie, 2018).
Significance of digital currency in china
According to the China monetary policy, the report that was published in 2013, recognized
that internet finance enhances the transparency of information, lowering the costs of the
transaction, and achieving financial efficiency. In China, digital currency is highly practiced due
to the increasing number of business activities. China is involved in international business through
the exportation of goods and products especially in Africa, it has to engage in digital currency to
enhance faster transactions. With digital currency, the buyers can be able to carry out financial
transactions within their geographical boundaries and purchase the goods and products at any time.
The statistics show that in China there are about 564 million users of the internet where the
majority are engaged in online payment.
Chinese internet companies have been involved in innovation and technological
developments in digital currency. The competitive environment has made them develop Yu’ebao
that plays the role of an online wallet by storing the e-money and making the transactions. Yu’ebao
is developed in a similar way to PayPal. The minimal transaction fees of the Yu’ebao provides a
higher interest rate of five times higher than the commercial banks (Li, 2015). In 2014, Yu'ebao
was China’s largest fund where it had assets over 250 billion yuan. There is another digital
currency in China known as bitcoin and, it has complete independence from the regulation of the
central bank. This has brought volatility in the market the Bitcoin digital currency does not allow
payments through third-party financial institutions and the governments’ authorities through the
People’s Bank of China. Bitcoin allows the users to have direct payments between the parties.
The statistics show that China has been providing more than half of the Bitcoin trading in
the world. Chinese Bitcoin Exchange Company shows that one day more than one hundred million
dollars are being traded (SÖNMEZ, 2014). The digital currency has, therefore, led to financial
liberalization in the market. The central bank of china is also affected by the high rate of digital

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DIGITAL CURRENCY 1 Your name Instructor’s name Course Date of submission DIGITAL CURRENCY 2 Introduction Digital currency refers to the electronic transmission of money using only the digital forms using technologies such as smartphones, credit cards, and the online exchanges of cryptocurrencies. There has being a lot of technological developments leading to an increase in the use of the internet. People have been using an interest in carrying out their business transactions using e-commerce applications. The traditional use of cash payments is not likely to compete with the electronic commerce market. The digital currency has made life to become so easy since the transactions overthrow digital currency are quick and they are completed by just clicking the phone. According to (Kumar et al., 2011), the introduction of cryptographic technology has led to peer to peer transaction leading to the decentralization of virtual money. The ordinary information is being secured using the passwords preventing frauds. The digital currency is transferred to another person without the use of financial institutions of the intermediary agents. The digital currency had become famous after the publishing of the Bitcoin white paper which involved the peer-to-peer electronic cash systems. Bitcoin had three main parts which bare miner, blockchain, and wallet. Bitcoin uses a combination of blockchain technology and distributed ledger technology (Skeie, 2018). Significance of digital currenc ...
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