The central bank is the dominant financial center of the country and an important tool for the state to intervene and regulate the development of the national economy. Responsible for the formulation and implementation of national monetary and credit policies, with unique currency issuance rights and financial supervision rights. The central bank of China is the People's Bank of China.

Unified currency issuance is the need for the central bank to adjust the money supply and maintain the stability of the currency according to the economic development in a certain period. Currency stability is the basic condition for the healthy operation of social economy. If there are many issuing banks, the central bank may not be able to adjust the monetary policy in time because it is difficult to coordinate the issuing banks when adjusting the total supply and demand of money.

To ensure the credibility of bank notes and the stability of monetary finance, bank notes must be convertible into gold coins at any time, and the deposit currency can be successfully converted into bank notes.

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The central bank conducts foreign exchange transactions according to foreign exchange supply and demand, adjusts the foreign exchange positions of commercial banks, and provides convenience for foreign exchange financing of commercial banks, thus monitoring the balance of payments.

As the lender of last resort in the banking industry, the lender of last resort means that when a commercial bank is unable to make immediate payment and is facing bankruptcy, the central bank provides loan support to the commercial bank in time to enhance its liquidity. Through this function, the central bank exerts influence on the activities of commercial banks and other financial institutions to achieve the purpose of macro-control.

Reference source: Baidu Encyclopedia-Central Bank