The Impact of E-Money Usage on the Velocity of Money in Malaysia
Abstract
The rapid adoption of e-money in Malaysia has significantly transformed the landscape of financial transactions. As consumers and businesses increasingly prefer digital payment methods, questions arise about how these shifts affect fundamental monetary dynamics, particularly the velocity of money. This paper investigates the theoretical and conceptual relationship between e-money usage and the velocity of money in Malaysia, proposing that e-money impacts money velocity through two primary channels: transaction efficiency and monetary substitution. A conceptual framework is developed to guide future empirical research and inform policymakers on the evolving role of digital financial instruments.
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