The influence of digital currency on mobile payment

6. Digital RMB sounds like a science fiction concept, but it has quietly become a reality
on the evening of October 8, 2020, the official microblog of Shenzhen Internet Information Office announced that in order to promote the construction of Guangdong, Hong Kong and Macao Dawan District, and in combination with the local consumption promotion policy, Shenzhen Municipal People's government recently launched a pilot project of digital RMB red envelope with the people's Bank of China. This means that the digital RMB in the process of practical application has been an important step forward
when we talk about digital currency, we usually think of bitcoin and other folk currencies based on blockchain technology. But they are essentially different
Yang Jun, a researcher of digital currency, introced to time finance that cryptocurrencies such as bitcoin are basically decentralized and illegal, and have no legal compensation, so there are great risks. The central bank's digital currency, like paper money, is centralized, legal, and has national credit endorsement
from the perspective of usage mode, digital RMB is more similar to the existing third-party mobile payment, but has the advantages of higher credit endorsement, stronger privacy management, more advanced means of payment and so on< According to Yang Jun's analysis, in the future, digital RMB will have a huge impact and challenge on the existing third-party payment means
it can be said that digital RMB "has come out"
for digital RMB, the central bank has long had a layout. In 2016, the central bank established the digital currency Research Institute. At the end of 2017, with the approval of the State Council, the central bank organized some commercial banks and relevant institutions to jointly develop the digital RMB system (DC / EP). In April 2020, digital RMB will be tested for the first time in Shenzhen, Suzhou, xiong'an, Cheng and the future Winter Olympics
Zhang Jinxi, director of Guangdong Creative Economy Research Association and chairman of Yimi Holding Co., Ltd., the initiator of blockchain instrial intelligent park, told time finance that the last closed test was limited in personnel and use scenarios, mainly to test the performance of digital RMB
"the first is the technical feasibility and security, the second is the performance of high-frequency payment and exchange, and the third is the convenience and friendliness of payment." Zhang Jinxi said.

7. It's an open question. It's a good one@ I agree with Huihang's answer. His examples are usually very detailed. I want to give a more general description. And @ daiyi thinks that mobile payment has an impact on consumer psychology and behavior, and I agree with him. But I won't expand the description. If micro, especially behavior, is also included, it may take us a whole day to discuss. In addition, I agree with @ keys Hayek's answer. The impact of Monetary Fund on the total amount of money lies in the change of direct financial proportion, or the proportion difference of credit creation activities affected by deposit rate. In other words, from the perspective of the whole society, if we implement a unified deposit rate for all credit creation activities, then any change in the creation path will not affect the currency circulation<

I will start to repeat the following:

(1) there are two levels to be distinguished.
first, compared with the absence of electronic payment (such as the first half of last century), how much has mobile payment changed the currency circulation? It's very big. As mentioned in many of the above answers, the speed of money circulation has changed
Second, on the basis of electronic payment (including credit card and debit card), how much has mobile payment changed the currency circulation? I think so, but not that big. I agree with brother Hui hang and many of the answers above. However, mobile payment does further rece the cost of money circulation (transaction cost) and the consumption psychology and behavior of daiyi friends, thus changing the speed of money circulation, that is, changing the actual commodity market equilibrium mentioned by many friends above. But compared with the impact of the electronic payment revolution, it is still much smaller at present

(2) a clear definition of this question
when we ask whether a has an impact on the currency circulation, it means that if there is no a, the currency circulation will be different if it is to meet the same demand

I think the answer to the main question is: Yes
the main effects include: changing the speed of money circulation, changing the money multiplier, and changing the money demand (or supply)
and the change of money demand (or supply) includes: the change of money credit creation caused by direct finance, the alleviation of information asymmetry caused by mobile payment, the change of credit creation and the impact on market clearing mechanism

however, it should be noted that mobile payment and yu'ebao are different concepts. Both of them have an impact on currency issuance, but they should not be confused. Yu'ebao is a monetary fund, which has nothing to do with mobile payment. If only mobile payment can be implemented, when the account arrives immediately, for example, the app developed by the bank itself is also mobile payment, there will be no monetary fund attribute< (3) the change of Monetary Fund (direct finance, informal finance) to money issuance (money multiplier, credit nature of money)
1. Money multiplier
because of the existence of deposit ratio, the money multiplier can make the total amount of money issuance present geometric order, so it will converge to a fixed value. And we can see the direct credit market as a bank without deposit rate, then there will be no geometric progression. At this time, this kind of credit expansion can only be directly restricted by the income (interest rate, various fundamental expectations) of credit creation. I want to go on after discussing the credit nature of money. However, it is obvious that when the proportion of direct credit creation without deposit limit increases, the monetary multiplier will change<

2. The credit nature of currency
a friend mentioned in the comments of @ Huihang's answer that does the mall coupon have any impact on currency issuance? Yes
modern currency is the attribute of national credit, or national credit standard (about the history of international monetary reserve system, I have time to put one of the three topics after the ten day talk). To understand, the essence of modern money is a kind of credit expansion

for example, you helped me with my business. I said, Lao Zhang, thank you. Please come to me if you have something to do in the future. Yes, at this time, currency has been replaced by a way of credit. In other words, my promise itself has the property of currency. It is precisely because of the existence of this credit relationship that people do not need to pay for every time to obtain the explicit storage value. If you, Lao Zhang, are not very familiar with you, then I will help you to pay for it. You also hope that you can get a return with considerable storage value. Generally speaking, it is money. Therefore, if you study the influence of rural human relationship on money circulation, you will get significant empirical results. If primitive people can barter for things, then modern people can also exchange heart for heart, which is the same truth

therefore, any kind of credit has the attribute of modern currency, which will naturally affect the circulation and circulation of modern currency. That's why the money of national credit can only be created by the central bank, and there are strong restrictions on institutional electronic money. If all large institutions adopt their own e-money, financial supervision will be difficult. For example, if you go to Wal Mart in the future, you don't need to swipe your card, but you need to swipe your Wal Mart currency card. If, ha, everyone wants to go to Wal Mart for shopping, and Wal Mart monopolizes more than 30% of the retail sales in the world, then the people who do business with you and talk about projects with you are willing to use Wal Mart currency for transaction settlement. Ha, are you familiar with it? It's similar to all kinds of foreign currency? you 're right. Because foreign currency is the credit of different countries. Just like the credit of different companies, they are all based on credit. Any credit in life has the property of modern currency, which will certainly affect the circulation and circulation of modern currency? In other words, if there is no such credit in life, then?)< From the above two points, we can know that direct finance (Monetary Fund), especially informal finance (formal finance refers to capital activities subject to financial supervision), has a significant al impact on money issuance. One is to change the speed of circulation, the other is to change the credit creation, which directly affects the money demand (also called supply, depending on the degree of endogeneity of a money market)

therefore, direct finance such as monetary fund can be regarded as a shadow bank without deposit rate, so monetary expansion can not have convergence results theoretically. However, in reality, credit income and expectation will affect the process of credit creation. For example, informal finance, private lending, I lent you 10000 yuan, you lent Lao Zhang 10000 yuan, Lao Zhang lent Lao Li 10000 yuan, Lao Li could lend Lao Wang 10000 yuan, Lao Li could also lend me 10000 yuan, and then I thought I had another 10000 yuan, I lent Lao Zhao 10000 yuan, So in theory, this process can continue without convergence (this is similar to the example of "1000 changes into 2000" mentioned by @ Huihang, but the main difference lies in whether it is direct finance or not, which has been mentioned at the beginning). But in fact, this process will not continue, because each loan needs an interest. In the end, the capital leverage will be very high to stop this credit expansion. The direct financial market will be restricted by various economic factors. Of course, it depends on the expectation of various economic factors in the future to judge the change of real interest rate. Ray Dalio's how the economic machine works briefly describes the change and economic cycle of this credit creation process. Irving Fisher, in his famous book prosperity and depression, also makes a wonderful non empirical discussion on this issue, and is good at "debt deflation theory" (how to understand Irving Fisher's debt deflation theory- Nash Lew's answer)< (4) modern bank run and the change of currency property
there is a neighbor problem. What will happen when modern banks run
if the bank goes bankrupt, it is consistent with the past run situation. Panic. People will rush to transfer their assets
if the bank will not go bankrupt, then it is inconsistent with the past run situation. In the past, in the first half of last century, people needed to use currency and implement various precious metal standard systems instead of national credit standard. Therefore, only from the perspective of liquidity demand, people would also worry about the lack of currency in banks and the sharp depreciation of currency, hoping to take out currency and replace assets. For example, we should pay close attention to buying houses and exchanging gold. Because a person's deposit in the bank is only a part of his wealth management, he will, of course, rush to the bank to run on the currency when the currency crisis occurs

however, in the essence of modern national credit, the first and the second point is much more relaxed. Unless you are worried about the risk of "the value of national credit" (including currency devaluation, sovereign crisis, political crisis, etc.), the assets (including currency) based on national credit will not have run crisis. Second, after the emergence of electronic payment, the nature of currency has changed a lot. In the past, currency was gold, silver and paper money. Now it's not. The money you transfer to another person is directly transferred from your current account to another person's current account. This is very different from the past. In other words, the attributes of cash and demand deposits have become more blurred than before

many economics textbooks are based on the era when currency and current deposit are essentially different. In the last century, when electronic currency was not popular, the public could only buy in currency, and a few people could use other means such as check or bill transfer. That is to say, if you want to buy something, you can't swipe your card. You must take out your current deposit in the bank, turn it into cash, and then buy it. The seller will deposit the received cash in the bank and turn it back into current deposit. This is a liquidity exchange with a cash holding stage. Now that e-money is very popular, even when buying a house, you can immediately change your current deposit in the bank into the other party's current deposit in the bank by transfer. Therefore, in this case, some previous analysis of the currency ratio (the relationship between interest rate and inflation) will change. For example, if there is no banking crisis, but only hyperinflation, then it is not necessary for people to take out the currency, hold it first and then buy it to change their wealth portfolio. When there is a banking crisis, the transfer or escape of currency is consistent with the past

these also have an impact on the amount of money issued (or the balance of money supply and demand), but they also affect the money supply and demand by affecting the circulation speed and credit creation< (5) mobile payment brings about a new change: information asymmetry (affecting credit creation and market clearing mechanism)
at the same time, mobile payment may bring about a new change, that is, easing the problem of information asymmetry, which will affect credit creation and market clearing mechanism