The Influence Of The Electronic Money On The Money Supply And Demand System

It has been an irreversible trend throughout the world that electronic money ("e-money" for short) is taking place of traditional money as a major tool of transaction and payment. Apart from the common characteristics of money, e-money enjoys some specific features during the process from issuing to circulation. It is these specific features that make it possible for e-money to exert influence upon on the money supply and demand system of the central bank.The e-money is a kind of non-standard money, which issue has an obvious market-based characteristic. Its issue is the competitive one, thus to break the situation that the central bank monopolizes the issuance of money, to challenge the independent position of the central bank, to reduce the money issue of the central bank, and even to deprive the central bank of the right of money issuance, which shall bring about the reduction of seigniorage revenues. E-money circulates on net almost at light speed, which will inevitably reduce the requirement of traditional money, also add the difficulty in measuring the money multiplier, and obscure the classification of money. All of this weakens the mechanism that central bank carries on to regulate the marcoeconomy by means of monetary base and money multiplier.E-money realizes the separation of its functions as "medium of exchange " " unit of account " and " store of value ", thus to challenge Keynes demand for money theory which is based on transactions motive, precautionary motive and speculative motive, and Friedman's quantity theory. The traditional money demand theories all suppose there is a stable and certain borderline among different uses of money, and the influential factors are also independent respectively. However the development of the e-money makes the conversion cost among the money of different uses very low, and the borderline between various kinds of monetary demands for different motives is more and more obscure as well. Quick conversion speed already make harder distinguishing of what kind of monetary demand and whether it is affected by income or by interest rate. At the same time the development of the e-money causes the change of the money demand structure, which shows as thereduction of money demand in transaction and precaution, and the increase of the money demand in speculation.In addition, the e-money is a kind of " market money ", Naturally it has some function of " world money " . The globalization of it depends on the internationalization how its issuer manages money and how consumers do trading. This all challenges traditional system of issuance of money and regulatory system. The main content of this text can be divided into three parts on the whole: First part is the introduction, which introduces the main subject, research approach, basic frame and innovation of the thesis.Second part is the main body. Firstly, define e-money, introduce its type, compare it with the traditional money and analyze its particular characteristics; Secondly, analyze the money supply behavior of the e-money issuer under the situation of Internet Economy. The analysis is set about the problem that the influence of e-money on the traditional money supply, to analyze how it influence the supply system of the traditional money through monetary base, the multiplier, the money flow speed and seigniorage revenues, etc; Finally, analyze the e-money's influence on Keynes' money demand theory and Friedman's quantity theory of money, and the demand situation and the demand motive under the e-money conditions.The third part is the conclusion, which summarizes the above parts and gave some measures and suggestions to the problems produced by the e-money on the money supply and demand.