September 30, 2009

The rapid development of electronic money and online payment challenges the traditional monetary system, and affects the central bank's monetary policies, said a senior official with the People's Bank of China (PBC) Monday.The amount of cash in circulation reached 3.4 trillion yuan ($500 billion) last year, and the gross payment, the total amount of money exchanged in transactions nationwide, was 1.13 quadrillion yuan ($166 trillion) as of last December, according to Ouyang Weimin, director-general of the Payment System Department of the PBC.

The gross payment calculation includes multiple transactions using the same bills, therefore leading to large amounts of cash being counted multiple times."The gross payment has risen rapidly, but the cash in circulation has kept steady at around 3 trillion yuan ($441 billion) these past few years. This indicates a rapid increase in the use of electronic money and online payment," he said.Electronic money, which is exchanged through Internet or other telecommunication channels, includes bank cards, shopping cards and prepaid cards.