Does fintech's development affect money demand? Evidence from Uemoa
Keywords:
Money demand, Payment system, Money supply, Monetary policyAbstract
The aim of this study is to assess the impact of financial technologies on the demand for money in the countries of the West African Economic and Monetary Union over the period 2000–2024. A Vector Error Correction Model was estimated using the modified semi-parametric least squares estimator. The results show that the number of ATMs, debit cards and the use of mobile money have a positive influence on money stock. Furthermore, the coefficient of the error correction term is statistically significant and negative, reflecting an adjustment mechanism towards long-run equilibrium. Consequently, it is imperative that the Central Bank of West African States closely monitors developments in financial technologies and explicitly incorporates indicators of technological innovation into its analytical frameworks. Such an approach enables monetary policy instruments to be adapted to the actual behaviour of economic agents, strengthens monetary stability, and ensures the effectiveness and credibility of monetary policy in a context of digital transformation.
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