Research On The Influence Of Digital Payment On Currency Multiplier

The deep integration of traditional finance and digital technology has accelerated the digitization process of payment methods.Digital payment has not only changed the public’s payment habits,but also brought opportunities and challenges to the implementation of monetary policy.The regulation of monetary multiplier is the key of national monetary policy and the key subject of financial research.Theory originates from practice.A large number of practices of digital payment in China have put forward a series of new questions to the traditional financial theory: how does digital payment affect the currency multiplier? What measures should monetary authorities take to deal with the impact of digital payment on the financial system? Answering the above questions is of great significance to maintaining the stability of China’s financial market.In order to understand the impact of digital payment on China’s currency multiplier,combined with China’s empirical data,this paper follows the following steps: first,the literature on currency multiplier and digital payment is systematically combed to inspire the marginal contribution of this paper;Secondly,it defines the core conceptual framework of digital payment,summarizes the evolution process and industrial status of digital payment in China,and puts forward the theoretical basis of this paper;Thirdly,based on the theory of money multiplier,theoretical analysis is carried out from two dimensions: on the one hand,starting from the traditional multiplier formula,the impact of digital payment on the transmission of money multiplier through cash leakage ratio,fixed deposit ratio and deposit reserve ratio is analyzed;On the other hand,the "digital payment scale" is incorporated into the traditional model to further derive from the substitution effect;Fourth,according to the characteristics of variables,a vector error correction model(VECM)is constructed to empirically analyze the impact of digital payment on currency multiplier.Through analysis,this paper draws the following research conclusions:(1)Digital payment covers a variety of payment methods such as mobile payment,which is a conceptual framework,and the existing payment methods are the basis for the issuance and use of fiat digital currency;(2)Digital payments have a real impact on the money multiplier,increasing the difficulty of central banks controlling the money supply.Multiplier theory believes that variables such as cash leakage rate and fixed deposit ratio determine the currency multiplier,and digital payment changes the behavior of market players,changing the above factors,indirectly affecting the currency multiplier from different directions,and the substitution effect of digital payment has an effect on the expansion of the multiplier;(3)In the short term,the narrow currency multiplier and the broad money multiplier will show a downward trend with the use of digital payments,but in the long run,the multipliers of these two types of currencies will still return to a stable equilibrium state.Combined with the actual situation and the above conclusions,this paper puts forward corresponding policy suggestions in the four dimensions of improving the regulation and control system,guiding market development,deploying standardized supervision and strengthening theoretical research.