Credit currency is stipulated by national laws, and it is compulsory to circulate functions of money's currency independently without any precious metals. At present, the currencies issued by countries all over the world are basically credit currencies.
The main forms of credit currency are promissory notes, bank notes, checks, compulsory paper money, debt money and electronic money.
Credit cards do not have circulation function, so they are not credit currency.
Credit currency refers to the currency whose value is lower than that it represents as a currency or even has no value, and can be circulated only by virtue of the credit of the issuer. The typical forms of credit currency are bank notes and government paper money. The former can be called a redeemable credit currency, because it is a debt certificate issued by the bank to the holder to ensure the payment of gold and silver currency. The latter can be called an irrevocable credit currency, because it is a value symbol issued by the government and forced to circulate by state power.
1. Promissory note
In the commodity credit purchase transaction, the capitalist can buy a certain commodity without paying cash, and only need to issue a debt voucher to pay the arrears regularly to the other party. At maturity, the holder may demand cash from the drawer according to the par value.
An unexpired promissory note, signed by the creditor on its back, indicates that it bears the debt, and the holder can also use it as a means of purchase or payment to buy goods or repay debts.
in addition, the holder can also apply to the bank for discount on the promissory note that has not yet expired. The drawee can deduct the interest from the promissory note before its maturity according to the interest rate.
2. Coins
Coins are mostly made of base metals, which are generally exclusively issued by the government and cast by a special mint. Its main function is to act as a medium in small or sporadic transactions.
3. Paper money
Most paper money is issued by the central bank of a country, and its main function is to undertake the means of purchasing people's daily necessities.
4. Bank deposits
Deposits are the creditor's rights of depositors to banks, and for banks, this currency is also the debt currency. In addition to the transfer payment in the bank account, the deposit should be paid by cheque, etc. At present, in the economic transactions of the whole society, the proportion of bank deposits as payment means accounts for the vast majority.
With the development of credit, this type of currency is widely used in some small transactions, such as customers' payment to retailers and employees' wages.
5. electronic money
due to the rapid development of science and technology and the application of electronic computing technology, the transaction and payment methods of money have entered a brand-new stage. Electronic money usually uses computers or stored value cards for financial transactions and payment activities, such as various credit cards, stored value cards, electronic wallets and so on.
At the same time, the amount of money stored can be supplemented by computers connected to the Internet, ATMs or telephone operations. This currency is very convenient to use and is constantly improving and further developing.