In 2024, mobile payment adoption in Macau continued to grow, with transactions increasing by 17.9% year on year to 354.7 million and a total value of MOP30.3 billion. This growth is underpinned by an expanding infrastructure of approximately 109,000 mobile payment terminals and QR code signs. Key drivers include the Simple Pay system, which integrates multiple digital payment methods, and Macau Pass’s expanded services via the Alipay+ network following its acquisition by AGTech.
This robust ecosystem complements broader efforts to enhance Macau’s financial infrastructure, including the introduction of advanced systems such as the real-time gross settlement for secure large-value transfers in Macau patacas, Hong Kong dollars, and Chinese renminbi, and the Easy Transfer faster payment system for rapid small-value interbank transfers in Macau patacas and Hong Kong dollars. Additionally, the Monetary Bills and Notes Trading System automates trading and clearing processes, enhancing operational efficiency and security within Macau’s financial system.
In response to the volatility and regulatory uncertainty surrounding cryptocurrencies, central banks have been inspired by their underlying technology to develop central bank digital currencies (CBDCs). These centrally controlled digital currencies leverage distributed ledger technologies and offer several benefits, such as reduction of cash management costs, and bolstering financial inclusion and financial resilience, which are particularly relevant for Macau given its role as a financial hub.
Introduction of the e-MOP
In 2023, Macau SAR repealed Decree-Law 7/95/M and Decree-law 32/93/M and enacted Law 10/2023 and Law 13/2023. These laws – the Currency Issuance Act and the Financial System Act, respectively – granted the digital pataca (e-MOP) legal tender status and enhanced the financial system’s flexibility. This update enabled Macau to start developing its own CBDC, maintaining public trust and ensuring its central role in the payment and settlement system. In other words, Macau’s legal tender now encompasses banknotes, coins, and digital currency.
Macau’s digital currency is being developed in three phases to enhance the region’s payment ecosystem and, according to its prototype, it will be accessible both in software (e.g., a mobile app) and hardware (e.g., a physical card), catering to diverse user needs, including those without smartphones.
With regard to the simultaneous existence of the physical and digital MOP, the current prototype has been programmed to ensure financial stability by maintaining a consistent overall currency supply, as financial institutions would proportionally adjust their holdings on digital or physical MOP accordingly, thereby facilitating a balanced exchange between the two currency forms. It is noteworthy that the e-MOP system guarantees real-time settlement finality, replicating the instantaneous nature of cash transactions. This ensures that transactions are irrevocable and completed immediately, enhancing the efficiency and security of financial transactions in Macau.
By design, the e-MOP adheres to Macau’s Personal Data Protection Act (Law 8/2005) and Cybersecurity Law (Law 13/2019), aligning itself with international anti-money laundering and counter-terrorist financing frameworks. This dual compliance structure maintains transactional transparency through layered security protocols and real-time validation processes.
The e-MOP is expected to integrate with the e-CNY and e-HKD, promoting cross-border transactions and economic integration within the Greater Bay Area. The Monetary Authority of Macau plans to conduct cross-border payment trials in the Guangdong–Macau In-Depth Cooperation Zone in Hengqin, facilitating financial services for residents in the area.
Challenges and opportunities created by the e-MOP
The operational framework of the e-MOP poses several challenges, including:
Implementing advanced risk mitigation strategies to identify unusual financial patterns;
Balancing managed anonymity with transaction traceability; and
Ensuring interoperability with other CBDCs through standardised API integrations.
This may require tiered authentication protocols and shared regulatory parameters for multi-currency smart contracts, and automated compliance checks. Further regulation in these areas is to be expected on par with the implementation of the technology.
On a final note, the introduction of the e-MOP is expected to have significant economic implications for Macau: by potentially reducing reliance on traditional payment intermediaries, it could create opportunities for new fintech entrants, fostering competition and innovation in the financial sector. This shift could further enhance Macau’s position as a financial hub, leveraging the benefits of digital currencies and potentially fostering competition and innovation in the financial sector in the Greater Bay Area.
