Ye Guiping: Macao should seize the opportunity of financial innovation to promote the development of modern financial industry

Tian Jing, a reporter from Southern Finance and Economics, from Macau On January 4, 2022, the digital RMB (pilot version) APP was launched on major mainstream app stores. On January 5, Meituan Waimai opened a digital RMB payment channel. On January 6, Tencent announced the start of providing digital renminbi services, and users can open the WeBank (WeChat Pay) digital renminbi wallet. Industry insiders believe that in 2022, the exploration of digital renminbi will enter the stage of full-scale testing, and the application ecology and transaction scale of digital renminbi are expected to be greatly improved.

The Macau SAR government has stated that it is paying attention to the development trend of the central bank’s digital currency, and plans to complete the legislation on digital currency in 2022, and will also make specific regulations on electronic payment and commemorative banknotes. Ye Guiping, Associate Vice President of City University of Macau, said in an interview with Southern Finance and Economics that Macau can use the central bank’s digital currency as an entry point to strive for the Guangdong-Macao Deep Cooperation Zone as a new pilot for DCEP and continue to promote the development of Macau’s modern finance and digital economy .

Macau has the conditions to develop digital currency

Lin Jingzhen, Vice President of Bank of China, pointed out earlier in his meeting with the Chief Executive of the Macao Special Administrative Region, Ho Iat Seng, that Macao has ideal conditions and space to develop digital currency, and it will also play a positive role in the construction of the Hengqin Guangdong-Macao Deep Cooperation Zone in the future.

It is understood that the coverage of mobile payment in Macau has continued to expand with the launch of the “Simple Pay” aggregated payment service in the first quarter of this year. Currently, more than 80% of merchants’ stores in Macau have been upgraded to “Simple Pay”, covering all over the country. All regions and all walks of life in Macao facilitate citizens’ travel and consumption, and play a role in promoting the development of Macao’s digital economy. “Juyue” is a collaboration between the HKMA and banks and payment institutions that provide local QR code payment services to interconnect their payment systems. The launch of “Juyy” also drives the rapid popularization of mobile payments in Macau.

According to the data of the Macau Monetary Authority, the number of transactions of local mobile payment tools in Macau in the third quarter of 2021 was 53.94 million, an increase of 12.3% quarter-on-quarter. The total value of transactions amounted to 5.3 billion patacas, an increase of 20.1% quarter-on-quarter, with an average value of 98.2 patacas per transaction. In the first three quarters of 2021, the number of mobile payment transactions in Macau has recorded nearly 140 million, with a transaction value of 12.77 billion patacas, about three times the same period in 2020.

The Secretary for Economy and Finance of Macau, Li Wei Nong, once said at the Legislative Council that mobile payment in Macau is developing rapidly, and the total transaction volume of mobile payment in 2020 will be five times that of 2019 and 71 times that of 2018. He described mobile payment as the “first key” to the digital economy, which not only facilitates the consumption of tourists in Macau, but also enables Macau’s SMEs to improve their management through data. In 2022, the arrangement will continue to be strengthened.

The rapid development of mobile payment in Macau provides good conditions for digital finance, which is one of the important paths for the development of modern finance in Macau. Ye Guiping believes that digital currency has become a new trend in global finance, and Macau must seize the new opportunities brought by financial innovation and development.

Digital currency is an alternative currency in the form of electronic currency. With the advancement of technology and the continuous evolution of economic activities, the legal currency in digital form issued by the People’s Bank of China, also known as digital RMB, is a digital currency equivalent to physical RMB. And has the characteristics of value and legal compensation.

Ye Guiping said that the legal effect of the central bank’s digital currency is higher, and any institution or individual must accept it and not refuse it when using and paying, and it can realize several offline payments. “Compared with the electronic payment currently used by citizens, the central bank’s digital currency is a more authoritative, reliable, advanced and convenient payment technology. Compared with traditional currencies, such as bank transfers and remittances, it has lower transaction costs. , speed and anonymity.”

At present, digital currencies are being studied all over the world, and the possibility of future issuance is being discussed, or issuance testing has already been launched. The digital renminbi is a legal digital currency that my country’s central bank is experimenting with. It has been piloting pilot programs in many cities from last year to this year. Recently, the central bank’s digital currency research institute and Hong Kong, Thailand, and Arabia jointly launched a multilateral central bank’s digital currency bridge research project.

Ye Guiping said that, as one of the central cities in the Guangdong-Hong Kong-Macao Greater Bay Area and located at the intersection of my country’s economic “dual circulation”, Macao can use the central bank’s digital currency as an entry point to strive for the Guangdong-Macao deep cooperation zone as a new pilot for DCEP , promote the cross-border use of digital renminbi, strengthen the cross-border financial construction of Hengqin, Guangdong and Macao in-depth cooperation, and continue to promote the development of modern finance and digital economy in Macao. On the one hand, on the basis of the cross-border financial cooperation between Qin and Macao, it will strengthen the training of technical talents in financial technology, and then promote the innovation of Macao’s capital market system and financial development. On the other hand, as an important bridge between China and Portuguese-speaking countries, Macao is actively cooperating with financial institutions in Portuguese-speaking countries to promote the cross-border payment of the central bank’s digital currency and at the same time accelerate the process of RMB internationalization.

Digital currency legislation will help the healthy development of Macau’s gaming industry

Ye Guiping said that the development of digital finance and modern finance in Macao is relatively late, and the supporting infrastructure for financial technology is relatively weak. At present, the central bank’s digital currency, which is the world’s leading digital currency technology, is only piloted in individual cities in the mainland. The concept of application scenarios is not understood enough. Ye Guiping told reporters that due to historical reasons, Macau’s capital market is mainly based on the circulation of traditional currencies, and the promotion of digital currency is mainly based on the Internet as the main means. In addition, the population of Macau is seriously aging, which makes the popularity of digital currency in payment. restricted.

Ye Guiping pointed out that the most fundamental difference between digital currency and other electronic payment methods is that the credit rating is different. Behind the digital currency is the national government credit, and behind other electronic payments is the corporate credit. “So for personal life, property security is higher, and digital currency transactions do not depend on the Internet, and transactions can still be completed offline, and the convenience is also higher. For enterprises, due to the traceability of digital currency. After being authorized by the enterprise, banks and other financial institutions can quickly obtain the real business situation of the enterprise, so as to accurately obtain the financial status of the enterprise and quickly assess the credit rating of the enterprise, so that banks and other institutions can enhance their willingness to lend to enterprises with good operating conditions and increase the credit line. , the efficiency of corporate financing will be greatly improved.”

Ye Guiping believes that after the Macau SAR government completes the digital currency legislation, Macau’s gaming tourism industry will be subject to stricter supervision. The digital currency has the characteristics of controllable anonymity, and the transaction amount and subject will be displayed in the settlement background. When a suspicious transaction occurs, the identity of the trader and the flow of funds can be quickly locked, which can prevent illegal acts from happening. It is believed that Macau’s tourism and gaming industry will develop more healthily after the legislation of digital currency.

Recently, the Macau Monetary Authority issued a message to remind the public that “virtual currency” is not legal tender or financial instrument, but is a highly speculative “virtual commodity”. Its transactions involve a lot of risks and are not regulated by the Macau Monetary Authority. All banks and payment institutions in Macau shall not directly or indirectly participate in and provide any financial services related to virtual commodity transactions, and hereby reiterates that any institution provides regulated financial services by any means without permission, such as Involving liquidation or cross-border fund transfer, etc., violates the relevant provisions of the “Financial System Legal System”.

Ye Guiping said that with the development of the global digital economy, the advent of Bitcoin was accompanied by the launch of various so-called cryptocurrencies by the private sector. Cryptocurrencies have the main characteristics of “decentralization”, limited total amount, no geographical restrictions and “complete anonymity”, and lack of value support, and the price fluctuates violently, making it difficult to play a currency function in daily economic activities. Cryptocurrencies are also mostly used for speculation, have potential risks threatening financial security and social stability, and become payment tools for illegal economic activities such as money laundering. Therefore, Ye Guiping believes that it is necessary to confirm the legal attributes of digital currency in legislation, to clarify the monetary attributes of digital currency, and to establish a digital currency supervision system.

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