The Research on the Money Supply of Central Bank Digital Currency

Chen Yuxuan(Nanjing Audit University, Nanjing, Jiangsu)
Zhou Kejie(Nanjing Audit University, Nanjing, Jiangsu)
Yang Wenhao(Nanjing Audit University, Nanjing, Jiangsu)

Abstract

Currently, the only central bank digital currencies (CBDC) in the world is Venezuela’s currency—Petro. Nowadays, the IMF, BIS, and major countries have conducted a lot of research on CBDC. It’s an urgent issue for the central bank to issue CBDC, determine and formulate the circulation of CBDC and the issuance speed, and supervise it. Therefore, establishing ARMA and VARs by sorting out literature, the paper uses the characteristics of CBDC--cash, and similarities with third-party payment in terms of payment to determine the circulation of CDBC by third-party payment users and currency in circulation. The model calculates and predicts the speed of circulation of digital currency. The issuance of CBDC will accelerate the circulation of money. In this regard, we will explore the impact of money supply on monetary policy and make relevant recommendations.

Keywords

Money supply; Central bank digital currency; ARMA model VAR model

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DOI: http://dx.doi.org/10.26549/jfr.v2i2.790