Macau utilizes mBridge CBDC for transactions with UAE and China worth $1.6 billion
Macau has joined a cross-border central bank digital currency settlement platform MBridge becoming one of those alongside Saudi Arabia, UAE, and China, with 11 banks in the city becoming the first participating institutions with transactions taking place with UAE and China.
The Monetary Authority of Macau had completed system integration with Project mBridge participants, allowing those banks to begin conducting transactions through the platform authority executive director Henrietta Lau Hang-kun was quoted as saying in a government news release.
After joining mBridge, the Multilateral Central Bank Digital Currency (CBDC) Bridge, local banks completed 23 cross-border transactions on the first day, according to the Monetary Authority of Macao (AMCM). AMCM said the transactions, conducted on June 3, were carried out by three of the 11 banks initially approved to operate on the platform. AMCM also noted that the system operated stably on its first day and that the other eight participating banks are advancing their preparations and are expected to complete implementation soon.
The CBDC system supports both commercial settlements and international remittances and is considered “a crucial step for Macau in the field of cross-border applications of central bank digital currencies.”
The transactions involved China, Hong Kong, and the United Arab Emirates, with a total value equivalent to nearly MOP13 billion ( $1.6 billion).
The move marks another step in the expansion of Project mBridge which had already brought together the central banks of mainland China, Hong Kong, Thailand, the United Arab Emirates and Saudi Arabia.
Speaking at a seminar on central bank digital currency development and cross-border financial innovation between China and Portuguese-speaking countries, Lau said a digital version of the pataca, Macau’s currency, had entered sandbox testing and would eventually be used for e-government services, on public transport and in campuses.
Macau, which reverted from Portuguese to Chinese administration in December 1999, retains deep institutional and cultural ties with the Lusophone world, making it a natural hub for trade and financial settlements between China and Portuguese-speaking economies.
Lu Lei, a deputy governor of the People’s Bank of China, said Project mBridge was steadily expanding its membership and business reach, adding that Macau’s participation in the platform and progress in testing the digital Macau pataca would help deepen financial connectivity between China and Portuguese-speaking countries.
He said he hoped that the digital Macau pataca system could be connected to CBETS, a bilateral cross-border settlement platform developed by China’s central bank for digital currency transactions. Such a link, he added, would help provide a more transparent, secure, efficient and lower-cost payment channel for economic and trade exchanges between China and Portuguese-speaking countries.
According to a January report by the Atlantic Council, Project mBridge had processed more than 4,000 cross-border transactions with a cumulative value of about US$55.49 billion – roughly a 2,500-fold increase from 2022.
The digital yuan accounted for about 95.3 per cent of total settlement volume, the Washington-based think tank said.
