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.
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