The Study On The Influence Of China’s Central Bank Digital Currency (CBDC) On Monetary Policy

With the development of Internet financial innovation technology,new forms have emerged in the way of payment of money and the field of exchange media in China,and the digital currency is born with the reform of the payment system.In the international environment,the countries using cash payments tend to decrease,and some countries allow private digital currency circulation,and the use of digital currencies has become an inevitable trend in the world.In recent years,governments around the world have stepped up the research and development of the central bank digital currency.The establishment of the central bank digital Monetary Research Institute in 2017 is a landmark event in the evolution of China’s monetary system.The digital currency of the central bank refers to the digital currency issued by the central bank under the block chain and the distributed accounting environment based on cryptography and point to point technology.The emergence of private digital currency has caused social demand for digital currency,and it also causes the exploration of the essence of money.The technology and legal support needed to be further explored.This brings great challenges to the issuance of digital currency in China’s central bank,especially to the stability of China’s monetary policy.This paper analyzes the influence of the central bank digital currency on monetary policy by using Marx’s monetary essence,money demand theory,monetary creation mechanism,and endogenous growth theory and money illusion.According to the monetary base of currency and the view of Marx’s monetary essence,the innovation of monetary form does not change the essence of the currency.Clearly defines the central bank digital currency provides the theoretical basis for the analysis of the central bank digital currency in this article.Based on the high liquidity of central bank digital currency in the Internet,the central bank digital currency has accelerated the adjustment of monetary policy tools,and the interest rate as an intermediary index is more important.Liquid circulation and currency information under the Internet has increased the uncertainty of monetary transmission.According to the theory of endogenous growth of money,the central bank digital currency strengthens the endogenous supply of money because of technological innovation and preference.Based on the monetary base of money and the concept of Marx’s monetary essence,this paper makes an empirical study on the influence of central bank digital currency on the effect of monetary policy innovatively,which is based on the historical data and theoretical deduction to analyze the contents of monetary policy,and supplements the previous research on the theoretical analysis of digital currency.In order to quantify the effect of the central bank digital currency on the policy effect,in view of the commonality of the electronic currency and the central bank digital currency,the data of the monetary multiplier,the speed of currency circulation,the rate of use of electronic money and CPI from 1995 to 2017,is taken as the empirical object.By constructing a linear regression model,CPI is used as a dependent variable to measure the impact of the legal tender under the Internet on inflation.The regression results show that the central bank digital currency will have a positive effect on inflation,and the legal currency promotes inflation by amplifying the currency multiplier and accelerating the speed of currency circulation under the Internet.In order to guarantee the monetary supply of our country with the economic environment,China should build and strengthen the legal system and the technical environment of the central bank digital currency,maintain a stable and neutral monetary policy,strengthen the marketization of interest rates,and provide a safe and sound environment for the currency circulation of our country.