Research on the Impact of Electronic Currency on Money Demand and Supply

Abstract

With the rapid development of electronic payment technology, its impact on the economic system has gone far beyond the scope of daily payment behaviors and is profoundly reshaping the basic theoretical framework of currency demand and supply. In the context of the digital economy era, traditional monetary theories exhibit obvious theoretical limitations when explaining the new economic phenomena caused by electronic money. This research has dual theoretical value: on the one hand, through a systematic analysis of the impact mechanism of electronic money on core variables such as the money multiplier and circulation speed, it can improve the existing monetary theory; on the other hand, the research results will provide important theoretical support for China to formulate cash management policies that are adapted to the development of the digital economy. This paper will analyze the complex influence of electronic money on currency supply and demand, and propose targeted policy recommendations.