Blog: Macau SAR considers embracing crypto-assets to modernise finance sector – International Financial Law Review

Distributed ledger technologies
(DLT) first made an appearance in 2008 aiming at the disruption of the global
financial system. Fast forward to 2021, and the global economy is faced with a
similar scenario, affected by travel restrictions and social distancing measures,
and where consumers and businesses’ habits seem to be favouring digital over
analogue as the potential of DLTs – including its crypto-assets – are
uncovered. Such social changes have not gone unnoticed.

On September 24 2020, a
proposal for the regulation of crypto-assets was published by the EU Commission
– via the Markets in Crypto-Assets Regulation (MiCA) –specifically targeting
digital representations of value or rights which may be transferred and stored
electronically. Such a regulation, as part of a comprehensive digital finance package
and aiming for more digital resilience in the European financial sector, may ultimately
have the potential to set global standards for the supervision and regulation
of DLT-based assets.

On a different approach,
China has recognised the potential of DLTs and has deployed its own ‘digital currency
electronic payment’ system, in which the digital renminbiis considered legal tender issued by the People’s Bank of China (to
be tested in Shenzhen, Suzhou, Chengdu and Xiong’an). This should allow
consumers and businesses to enjoy the benefits of e-payments without resorting
to e-payment service providers.

Similarly, reports
published by the Monetary Authority of Macau revealed that e-payments have also
been increasingly popular in town. However, although digital currency and
crypto-assets are not currently regulated or accepted in the Macau SAR, it
seems that the time is approaching as the integration of the Macau SAR in the
Greater Bay Area strengthens.

Following the launch of
the Renminbi and Hong Kong Dollar Real Time Gross Settlement systems, the Macau
SAR government has announced that the ongoing plans for the modernisation of
the local finance sector will culminate in the revision of the Macau Financial
System Act. Legislators will likely face the issue of whether to accept and
regulate crypto-assets as part of the local financial system, thus allowing for
a better alignment with the more modern financial systems of China and Hong
Kong SAR.

João Nuno Riquito

Managing partner, Riquito Advogados

Daniel de Senna Fernandes

In-house consultant, Riquito Advogados

© 2021 Euromoney Institutional Investor PLC. For help please see our FAQs.

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