The reason why bills of exchange can replace cash as the main settlement tool in international trade is that they have the following characteristics. It is precisely because of these characteristics that they can play a role in international settlement.
Circulation
Circulation (or transferability) is the most basic characteristic of bills of exchange. It means that bills of exchange can replace cash in the market, and the rights on the bills of exchange can be freely transferred by endorsement or delivery without notifying the original debtor. Unless the words “Not Negotiable/Not Transferable” are stated on the bill of exchange or it is stated in other forms that it is not transferable, the transferee will obtain all the rights of the bill of exchange after obtaining it and has the right to exercise these rights in his own name.
There are generally the following ways to pay the holder through bills of exchange.
(1) Payable to the order of a specific person.
(2) Payable to bearer.
(3) The only or last endorsement on the bill of exchange is an endorsement in blank.
(4) Payable to a specified person.