The Influence Of Electronic Money On Monetary Policy

As result of network technology development and financial innovation, electronic money is sign of new type financial mean. Meanwhile, electronic money directly induces second fundamental evolution of monetary formation after mint replaced with bank note. Nowadays, electronic currency, as a popular means of exchange and of storing value in the world is challenging the traditional trading means, the theory of Internet financial service also is forming with the development of electronic money.Money is the most basic object of the monetary theory and monetary policy, the meaning of the money and the controversy over the nature of money has always been a focus of the study of the financial theory. The emergence of electronic money opened the curtain on the network monetary theory, and brings a strong challenge to the traditional concept of money .The e-money refer to electronic pay instrument intermediated transaction by electronic equipment and network with keeping fix exchange rate with fiat. E-money inherit most money characteristics, but compare to fiat it shows very different natural in lots of aspect. For example, Cryptography is commonly used to authenticate messages and devices and to protect the integrity and confidentiality of data, instead of the physical security features applied to cash and other paper-based instruments. As a non-fiat it is inside money that allows person-to-person payments without the intervention by the issuer or another central clearing system. Electronic money is a non-standard currency, it issued a clear market-oriented features .The electronic money is not a" measure of value", the functions of its value on the" measure "is still dependent on the "scale"of monetary authorities statutory. E-money is not effective" means of storage", despite it's the media which has a higher efficiency; the international issuing of electronic money rely on issuers' transnational business activities , and so on, it's all shown that the monetary theory of financial network is different from the traditional concept of that.Although e-money is subjected to the traditional money, it will replace the traditional money in future with its more and more extensive using. Then some financial risks will accrue and lead to the monopoly of money supply is being broken due to the expansion of e-money, finally make the central bank change over to a new way. The Internet economy, on one hand, those corresponding financial transactions into a single electronic platform, and hence speeds up the velocity of circulation of money On the other hand, the diversification of e-money' s issuance, the swift change between money in various levels and the widened substitution between financial assets make it complicated and difficult to define or compute the money stock.. Thus it's have an important impact on the formulation and implementation of monetary policy。So to have comprehensive reach on e-money is very important now. And then we can put up some advices for central banks when they want to issue some money policies or to evaluate the effect of money policies that they have executed. Based on research made by other scholars, I carry out these papers. First, I introduce the development of e-money, analyze monetary definition of e-money and discuss the issues related to monetary theory. Secondly I construe of the effectiveness on the money supply and the demand of E-money. Then I discuss the effect that e-money will cause to the monetary policy from four different fields: E-money on the impact the tools of monetary policy, intermediate goal and transmission mechanism of monetary policy and the Independence of monetary policy. At last, I give my opinions on how to deal with the problems that are caused by e-money.