FINTECH AND ITS IMPACT ON THE DEMAND FOR MONEY: CHALLENGES FOR TRADITIONAL MONETARY THEORY

Abstract

Technological evolution has radically transformed financial systems, redefining the concept of money and transaction mechanisms in the global economy. The COVID-19 pandemic accelerated this process, promoting the use of digital payments and the expansion of Fintech, whose emergence has not only optimized operational efficiency but also democratized access to financial services. However, these changes have created challenges in measuring economic activity and adapting regulatory frameworks. This research focuses on analyzing how digital financial instruments are altering the demand for money and their impact on traditional monetary theory. Three key phenomena are identified: the decline in the use of physical cash, the emergence of new digital assets, and the transformation of liquidity and savings behavior in Bolivian society. A quantitative approach based on the inductive method is adopted, allowing for the observation of the evolution of digital transactions and their relationship with existing monetary models.

From an economic theory perspective, the study examines fundamental concepts of money, its typology, and classical approaches to the demand for money—from Fisher’s quantity theory to Keynes’ liquidity preference theory. In this context, the research aims to develop an updated interpretative framework that explains the new dynamics of liquidity and contemporary payment methods in an increasingly digitized financial environment.