Research On The Influence Of The Third-party Electronic Money On China’s Money Supply

The third-party electronic money is a new kind of electronic money in recent ten years.As soon as it appeared,it has been highly concerned and actively applied.Both the frequency of use and the scale of transactions have maintained a trend of rapid development.In 2019,the number and amount of third-party e-money transactions in China increased by 46 times and 26 times respectively compared with 2013.In this process,the development of third-party e-money has also brought unprecedented influence: on the one hand,this new form of money makes money payment more convenient and efficient,improves the payment efficiency and transaction activity;on the other hand,the multifield application of third-party e-money is gradually replacing the traditional currency(cash),challenging the status of legal tender.More importantly,it has changed the money supply and the structure of different levels of money,thus causing many impacts on the central bank’s ability to perform the function of money issuance,regulate money circulation,and increasing the instability of economy and finance.With the continuous development of the third-party e-money,these influences will become more and more significant,and need to attract the central bank’s high attention and attention,make predictions and research responses in advance,and continuously improve the ability to control currency and stabilize the economy and finance.In this context,this paper will focus on the impact of third-party e-money on China’s money supply.Centering on this topic,the research mainly includes four aspects: first,combined with the needs of the development of the times,explore how to classify electronic money more reasonably,and make clear positioning of third-party e-money;second,on the basis of Jorton model,adds new influencing factors on the basis of the traditional theoretical model,through changing the monetary structure,thereby changing the money multiplier and velocity of money,and affecting the internal mechanism of the money supply;third,it builds a data model,through empirical research,to analyze how the third-party e-money affects the money supply through money multiplier and velocity of money;fourth,it builds a quantitative analysis model to analyze the scale and degree of the third-party e-money replacing cash.On this basis,this paper discusses how the central bank regulates the money supply and grasps the law of money operation.The main significance of the research lies in: first,the theoretical significance.This paper discusses the operation law of money under the new situation,makes a beneficial exploration and necessary supplement to the applicability of traditional money supply theory,and investigates the internal mechanism and specific substitution degree of the third-party e-money replacing cash;second,the practical significance.This paper tries to solve the influence of the third-party e-money on the money multiplier and the velocity of money,and tries to provide a useful reference for the Central Bank of China to better grasp the law of money circulation,effectively control money,implement monetary policy and deal with financial risks in the Internet era.The main conclusions of the study include:(1)The development of third-party emoney will increase the money multiplier in China as a whole.However,the change of public behavior,the operation mode of issuing institutions and customer reserve management policies will lead to the different influences of the third-party e-money on the money multiplier,thus increasing the difficulty of the central bank to control the money supply;(2)In the long run,the development of the third-party e-money will increase the velocity of money,and the money supply will become more complex;(3)The third-party e-money has a significant substitution effect on cash.By 2019,about1.48 trillion yuan of cash has been replaced by the third-party e-money,but the substitution speed has slowed down in the past two years.At the same time,the development of third-party e-money reduces seigniorage revenue.Based on the above conclusions,the following suggestions are proposed:(1)Actively respond to the challenge of the third-party e-money to legal tender,strengthen the supervision of issuing institutions,and prevent its unrestricted development from having a serious impact on money supply;(2)Strengthen the research on the third-party e-money,strengthen the statistical and monitoring work,scientifically analyze the future development trend of various types of money,and constantly improve the ability to judge the demand for money and regulate the supply of money;(3)Timely promote the change of monetary policy from quantity oriented to price oriented,and continuously improve the implementation effect of monetary policy;(4)Increase the R&D,testing,promotion and application of the central bank’s digital money,so as to fundamentally solve the challenge of the third-party electronic money to the central bank’s money issuance right.