Macau, a Special Administrative Region of China, is set to launch its own central bank digital currency (CBDC) called e-pataca, with plans to connect it to China’s digital yuan and Hong Kong’s e-HKD. Working with the Digital Currency Research Institute of the People’s Bank of China, the Macau government aims to debut a prototype of the e-pataca during the 25th anniversary celebrations of Macau’s handover on December 20.
Unlike mainland China, Macau operates under the ‘one country, two systems’ principle, giving it its own economic and legal system. The pataca is the local currency, issued not by a central bank but by two commercial banks. The Bank of China’s Macau branch will lead the development, issuance, and redemption of the e-pataca, with plans for Banco Nacional Ultramarino to join later on.
Secretary for Economy and Finance Lei Wai Nong emphasized the importance of the CBDC for Macau due to the growing popularity of digital payments among residents and tourists. Electronic transactions have seen a significant increase in recent years, with advanced technologies like Tencent’s Weixin Palm Pay service driving the shift towards digital payment methods.
Initially focused on local payments, the e-pataca project aims to eventually facilitate international transactions by integrating with the digital yuan and e-HKD. This move is expected to make cross-border payments more convenient and create economic opportunities in the Greater Bay Area, which includes Macau, Hong Kong, and other neighboring regions.
With a heavy reliance on its gambling industry, which accounts for a significant portion of its GDP, Macau faces uncertainties regarding the impact of the e-pataca on this sector. The government estimates massive amounts of bets will be placed in the coming year, raising questions about how digital currency integration may affect the traditionally private nature of gambling transactions.
In conclusion, Macau’s plans to launch the e-pataca and connect it to China’s digital yuan and Hong Kong’s e-HKD signify a step towards modernizing its financial infrastructure and facilitating digital payments. The integration of these central bank digital currencies is expected to streamline cross-border transactions and boost economic opportunities in the region. However, the impact on Macau’s gambling industry remains to be seen, as the shift towards digital currencies may introduce new challenges and considerations for this vital sector of the economy.
