Abstract
The introduction of electronic currency is the third revolution in the history of currency followed by precious metal currency and paper currency. It has been an irreversible trend throughout the world that electronic currency is taking place of traditional bank notes and coins as a major tool of transaction and payment. Apart from the common characteristics of currency, electronic currency enjoys some specific features during the process from issuing to circulation. It is these specific features that make it possible for e-currency to exert influence upon the issuing rights of central bank, the implementation of monetary policy, and the monetary policy of central bank to a very different extent.
The article consists of three chapters. Chapter one is an introduction to electronic money, describing the definition, function, intention, characteristics and development at home and abroad. Chapter two analyses the challenges of e-currency on the effectiveness of monetary policy. The analysis is carried out in the following fields: currency supply, monetary policy instruments, medium objectives of monetary policy and monetary effect. Chapter three is the conclusion which summarizes the above parts and gives some countermeasures and suggestions to the problems produced by the e-money on the monetary policy.
【Key Words】Electronic money; Central bank; Monetary policy; Implication.