The Research On Currency Digitalization

Guided by Marx’s theory about relationship between the entity money and themoney of accout, this thesis has made a deep study of how the digital money breaksthrough the restrictions of the entity money and expands rapidly, how the digitalmoney meets the needs of trade and capital operation，how the digital moneypromotes the development of trade and production and the overall economic in thecontemporary when credit economy has highly developed. At the same time thisthesis has made a study about the fact that the expansion of the digital money iscertain to be restricted by the entity economy and the entity money. Once the digitalmoney expands too excessive, there will be a monetary crisis.Based on above Thisthesis has first studied the concept of digital money and then pointed out thatcurrency digitalization is the requirements of the monetary functions.Entity currencyis transformed into digital money when implementing the five functions ofcurrency，it’s transformed into future digital money when implementing the capitalfunction of curreny. Then，we’ve analysed the traditional theory of money quantityfrom the perspective of digital money，and pointed out that the truly meaningfulmoney supply is not the money created by the bank but the digital money incirculation. Banks can only manage the money supply under the trading position.According to this we made empirical analysis on Chinese quantity of money in orderto provide theoretical references for Chinese central bank to develop themacro-monetary policy. This paper made a special research on subprime lendingcrisis based on Marx’s theory of monetary crisis.By studying the expansion of theU.S. digital money，we pointed out that the conflict between the future digital moneyrepresented by the MBS，CDO，CDS securities and the the reality money has leadedto the breaking out of the conflict between the commodity represented by housing and the currency.That is the root causes of the subprime lending crisis. Finally，wemake a theory and empirical analysis on the Fed QE policy based on Marx’sthinking of money quantity，pointing out that the American public is lack ofconfidence in the U.S. economy because of the weakness of the American entityeconomy.So base money issued by the FD can’t be transformed into the realpurchasing power in circulation, it cann’t stimulate production especially the themanufacturing. It can only play a role in the financial markets. This is the root causeof the fact that the QE policy can’t achieve the desired intent.