Macau Could Be Positioning Itself Closer to Use of China’s Digital Currency

Several months ago, a disturbing report surfaced that indicated that Macau might be considering adopting China’s new digital currency, the digital yuan, as the primary currency at the city’s casinos. The rumors were initially refuted by city leaders; however, the revelation had been made by sources involved with the initiative. Now, there’s no denying the fact that Macau is going to embrace some type of digital currency, as the city’s chief executive, Ho Iat Seng, has confirmed that changes to legal code are coming that would authorize the issuance and use of a digital tender.

Digital Currency Gains Momentum in Asia

The legal changes coming to Macau don’t necessarily reflect the use of China’s digital currency as the go-to option, but the writing is on the wall. Macau’s top legislator told lawmakers this week that the city’s government is going to collaborate with China’s central bank in order to “study the feasibility of issuing a digital currency.” China has already begun to put pressure on Macau in order to shape its internal operations and the country has made it clear that it will take a commanding role in the city’s future. Introducing the digital yuan would go a long way toward fulfilling that goal.

Shifting to digital currency is seen as a better way to combat money laundering and tax evasion, according to Ho and China’s leaders. However, it also gives China more control over Macau’s operations, as well as its gamblers. The country has already begun testing its digital yuan in various cities and the system will allow China to monitor all purchases made by anyone at any time.

Big Brother Is Watching In China

It’s already accepted that China keeps a close watch over its citizens, but the introduction of the digital yuan takes things to an entirely new level. In addition to being able to see who is buying what and where the country has suggested that the use of digital currency could be mandatory and exclusive. It would require citizens to register to download a government-backed cryptocurrency wallet, and there have been concerns that China will be able to shut off wallets at will or remove held funds without justification.

Macau is likely to see a considerable drop in gambling activity if it begins to use the digital yuan – perhaps not so much if a different digital currency were introduced. Already, many junket operators have begun to shift their focus elsewhere and, as China prepares for the widespread introduction of its digital yuan before Beijing hosts the Winter Olympics next year, a greater impact will be felt. However, some industry analysts feel that including the digital yuan as an option would be a good thing. Vitaly Umansky of Sanford C. Bernstein believes its inclusion alongside other currencies will help the premium mass-market segment in the long run, as it will give greater access to money in the city.