Legal tender background of the Republic of China:
After the outbreak of War of Resistance against Japanese Aggression, the government implemented the foreign exchange control policy, and legal tender became the paper currency standard. Recover other banknotes within a time limit. It also stipulates that all public and private funds must be received and paid in legal tender, and the market silver dollar will be nationalized, 1 legal tender exchange 1 silver dollar. The legal tender was originally linked to the pound and can be exchanged indefinitely in designated banks.
Ending:
During War of Resistance against Japanese Aggression and the War of Liberation, the Kuomintang government adopted the inflation policy, and the legal tender depreciated sharply. 1948 After May, Weng became prime minister and Wang became finance minister, and began to plan another monetary reform, replacing legal tender with gold certificates.
1948, 18 In August, the government ordered monetary reform, replacing legal tender with gold certificates and forcibly converting gold, silver and foreign currencies into gold certificates. However, due to hyperinflation caused by excessive development, a large number of urban middle classes went bankrupt.
Extended data
The legal tender issued by the national bank and guaranteed by the national credit decoupled the currency from the precious metals with fluctuating prices, which was a progressive financial system reform in China at that time, and also a proper feature under the modern national financial system. The issuance of legal tender unifies the domestic currency, while the control of currency issuance falls in the hands of the government, and the domestic hard currency such as silver is therefore concentrated in the hands of the government.
Legal tender refers to commodities or goods that do not represent substance, and the issuer has no obligation to cash in physical currency; Only by relying on government decrees can it become legal tender. The value of fiat money comes from the owner's belief that money can maintain its purchasing power in the future. Money itself has no intrinsic value. When paper money came into being, legal tender was essentially negotiable paper money stipulated by law.
The legal tender in People's Republic of China (PRC) is RMB, and the People's Bank of China is the competent authority of RMB, responsible for the design, printing and distribution of RMB.
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