The Impact of E-money on China's Money Supply

Electronic money alters the form of currency, reduces the demand for cash, alters the manner in which transactions are settled, and alters the quantity of reserves held by our commercial banks. Electronic money makes the relevant factors acting on the base money supply more complex, which will undoubtedly make it more difficult for the central bank to achieve control over the base money, thereby further weakening the central bank's ability to manipulate the money supply and affecting the effectiveness of the central bank's monetary policy target of the money supply. Therefore, a correct understanding of the impact of electronic money development on the base money supply is crucial for enhancing the effectiveness of monetary policy in China in light of the expanding scale of electronic money in China.