1. The issuance of currency belongs to the sovereignty of a country. Each country issues and uses its currency according to its own needs without consulting other countries.

2. International trade will produce currency conversion and exchange rates.

3. The formation of exchange rates between open currencies is mainly based on market forces, which reflects the basic purchasing power of currencies and the supply and demand relationship between currencies. If the exchange rate deviates from its purchasing power, there will be arbitrage opportunities in the market, and arbitrage transactions will return the exchange rate to its original value. A simple example: buying a sheep costs 1,000A yuan in country A and 500B yuan in country B, so 1B yuan = 2A yuan, reflecting the difference in purchasing power; if it can be exchanged in the market at 1A yuan = 1B yuan, it will Someone exchanged 500A yuan for 500B yuan (originally it could only be exchanged for 250B yuan), bought a sheep from country B for 500B yuan, and then sold it to country A for 1000A yuan, making a profit of 500A yuan. This kind of arbitrage transaction will increase the demand for B dollars, and will also affect the price of sheep in the two countries, eventually causing the exchange rate to return to 1:2.