According to Article 8 of the Agreement of the International Monetary Fund, as a general obligation of member countries, a country's currency must meet three conditions before it can become a cash exchange:

1. There are no restrictions on the current account (trade and non-trade payments) and capital transfer in China's balance of payments.

2. Don't take discriminatory monetary measures or multi-currency exchange rates.

3. At the request of another member state, it is obliged to buy back the remaining domestic currency in the current account of the other party at any time.

A freely convertible currency is widely used in international exchange settlement, freely traded in the international financial market, and freely convertible into the currencies of other countries. In international trade, the import and export trade settled in these freely convertible currencies is called spot trade.

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Foreign exchange widely used in international settlement and payment and freely convertible into other countries' currencies. Countries that issue these currencies have relaxed foreign exchange control and control, some even basically abolished foreign exchange control, while others have implemented strict foreign exchange control, which prevents their currencies from being freely convertible into internationally used foreign currencies and stipulates that their currencies cannot be taken out of the country.

There are more than 50 freely convertible currencies in the world, mainly including US dollars, British pounds, Japanese yen, Hong Kong dollars, Swiss francs, Singapore dollars, Canadian dollars, Australian dollars, euros and New Zealand dollars, as well as drafts, checks and stocks expressed in these currencies. Payment vouchers and credit vouchers such as bonds are free foreign exchange.

Baidu Encyclopedia-Cash

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