Internet finance influences China’s monetary policy in two ways. First，it changes the management behavior of micro banks through “catfish effect”，thus enhances the industry competitiveness of interbank offered rate，and further affects the interest rate formation mechanism of China. Second，by changing the cash-deposit ratio and excess reserve requirements in the financial market，internet finance influences the monetary multiplier，aggregate money supply and velocity of money circulation. Based on theoretical framework of banking operations，we introduce the external shock of internet finance to the interbank market. Our results show that the internet finance improve the sensitivity of bank deposit scale and interest rates to interbank offered rate through two channels. One is agglomeration effect，the other is information transmission effect. Also，internet finance triggers the fluctuation of narrow money multiplier and reduction of the velocity of money circulation. Therefore，it’s necessary for China’s monetary policy to adapt to the needs of internet financial era，and develop a new complementary framework of money supply and money circulation velocity on the basis of conventional monetary policy，through which improve the objectiveness and effectiveness of quantitative monetary policy.