Matters related to the release of Macau Monetary Authority's digital Macau Pataca!

On the occasion of the 25th anniversary of Macao’s return to the motherland, the digital pataca prototype system has completed its “debut”!

Recently, the Monetary Authority of Macau officially released the White Paper of the Macau Special Administrative Region Digital Macau Yuan, and publicly demonstrated the prototype system of the digital Macau Yuan.

Macau’s Secretary for Economy and Finance, Lei Wai Nong, announced at a press event that with the support of the People’s Bank of China, the Macau SAR has successfully built a prototype system for the digital Macau pataca (e-MOP), laying the necessary foundation for the future development of the digital Macau pataca.

Subsequently, after ensuring that the infrastructure is complete, undergoing comprehensive testing and ensuring controllable risks, the digital Macau yuan will officially debut.

Five years to sharpen a sword

Recently, to celebrate the 25th anniversary of Macau’s return to the motherland, the “Celebration of the Successful Construction of the Prototype System for Digital Macau Yuan and the Release of the White Paper on Digital Macau Yuan” sponsored by the Macau Monetary Authority was held.

Earlier, in September this year, the Monetary Authority of Macao and the Digital Currency Research Institute of the People’s Bank of China (referred to as the ‘PBoC Digital Research Institute’) held a meeting on the digital Macanese pataca (e-MOP) prototype system public demonstration event, discussing various preparations and the next phase of work deployment.

In April, the Monetary Authority of Macau signed a contract with a wholly-owned subsidiary of the Digital Money Institute of the People’s Bank of China to build the Macau Smart City Financial Project (Phase I), marking the official start of the system development work for the Digital Macau Yuan project Phase I.

Looking back, as early as 2019, the Monetary Authority of Macao had begun deploying the Digital Macao Pataca project.

In September 2022, the Monetary Authority of Macau and the Digital Currency Research Institute of the People’s Bank of China signed a Memorandum of Cooperation for the Digital Macau Yuan Project. Subsequently, the two parties, together with the operating organization of the initial phase of the project, formed a joint working group to carry out various preparations. To implement the contents of the memorandum, the two parties have conducted multiple rounds of online and offline communication and exchanges on the financial infrastructure system in Macau, the mobile payment market, the development of e-government, the selection of local data centers, project implementation plans, and supporting rules and regulations.

In 2023, Macau re-enacted the “Currency Issuance Legal System” to lay a certain legal foundation for the issuance of regional digital currencies.

Meet the needs of multi-scene payment

Regarding the positioning of the digital Macau Pataca, Chen Shouxin, Chairman of the Administrative Committee of the Monetary Authority of Macau, stated that the digital Macau Pataca, as the legal currency of the Macau Special Administrative Region, has the same legal status and value as paper money and coins, with 100% reserve support and full legal tender status.

“The digital Macau dollar is the safest asset in the Macau Special Administrative Region. The Monetary Authority of Macau is responsible for supervising and managing the issuance, cancellation, and circulation of the digital Macau dollar, and selects commercial banks with sufficient capital and technological strength as operating entities with strict standards.” Chen Shouxin emphasized that, as a fully convertible currency, the design of the digital Macau dollar strictly adheres to the international organization’s arrangements and regulatory principles for central bank digital currencies, respecting the policies and laws of various countries or regions to meet regulatory and compliance requirements.

Specifically, the carrier of digital Macau dollars can be divided into hardware wallets and software wallets, providing efficient and convenient payment tool options for different groups. Among them, the digital Macau dollar hardware wallet equipped on various hardware devices can meet the payment needs of tourists, the elderly, and other user groups in various scenarios.

In addition, the Monetary Authority of Macao has developed a digital Macanese pataca APP, in which a soft wallet provided by the operating institution can be opened, including wallets of different levels set according to the degree of identity verification, and wallets specifically designed for young people.

It is understood that in addition to providing conventional payment functions such as ‘scan-to-pay’ and ‘payment code’, as well as transfer, bank account recharge and withdrawal, wallet balance transfer to bank account, and interoperability with hard wallets, the digital Macau Pataca soft wallet will also introduce innovative functions such as ‘smart contracts’ and ‘top-up as needed’ in the future.

Progressive work in stages

Regarding the follow-up development path of Digital Macau Dollar, the whitepaper clearly states that the Monetary Authority of Macau will implement it in stages, progressing through three phases: “Infrastructure and Core System Development”, “Internal Closed Trial Operation”, and “Comprehensive Public Testing”.

Subject to the assurance of sound infrastructure, comprehensive testing, and manageable risks, the digital Macau Yuan will be officially launched.

In terms of application scenarios, Chen Shouxin revealed that in the short term, the research and application of the digital Macanese yuan will focus on the retail sector. As related financial software and hardware facilities and technologies continue to mature, it will expand to the wholesale level in the medium to long term and enhance the ability of the digital Macanese yuan in cross-border payments.

In the future, the Monetary Authority of Macau will also promote the interconnection between the digital Macau Pataca system and other payment systems and financial infrastructure, and build a modern financial system that is suitable for the development of the digital economy.

“With the strengthening of financial cooperation among cities in the Guangdong-Hong Kong-Macao Greater Bay Area, looking ahead, we look forward to achieving interoperability in the field of legal digital currency, especially in the connection between digital Macau Pataca, digital Renminbi, and digital Hong Kong Dollar. This will bring greater convenience to cross-border payments and further promote the economic integration process within the Greater Bay Area,” Li Weinong said. The SAR government will continue to optimize financial infrastructure, establish a reputable and secure payment settlement environment for digital financial innovation products and services, and promote high-quality economic development.

Chen Shouxin also said that the SAR government will fully leverage the unique advantages of the Guangdong-Hong Kong-Macao Greater Bay Area’s “one country, two systems, three legal currencies”, combined with the central government’s financial support policies for the Hengqin Guangdong-Macao Deep Cooperation Zone, and give priority to exploring the application of digital Macau yuan in Hengqin, providing a more convenient financial environment for Macau residents’ cross-border living and employment.

(Source: Securities China)

Source: Oriental Fortune Net

Author: Securities China