An Empirical Analysis of the Impact of Development e-money on the Capital Markets in China

Investment

Electronic money has garnered significant interest in recent years. It is the newest payment instrument. Due to its role in the new electronic payment system, professionals, quiz both its implications in advancing the development of banking functions and the overall economy. The study seeks to understand the real effects of e-money, monetary authorities place them in a better chance of forming the appropriate legislature to regulate the e-money environment. This will aid monetary authorities in the exercise of rightly positioning e-money among money components. The study employs the autoregressive distributed lag model using quarterly data from the period 2011 to 2021 in China to explore the effects of e-money on monetary policy and track transmission through money supply to capital markets. The study finds that e-money services have a notable contribution to monetary conditions and interest rates. Their operations are contributing heavily to the monetary aggregates, they have the potential to maneuver interest rate also as monetary aggregates and interest rates are closely related.

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