The gambling industry in Macau is set to go through some significant changes as we enter the new year. One of the things that have the real potential to shake the market in the gambling hub of Southeast Asia is the introduction of the digital yuan (CBDC), the digital currency of China’s central bank. This would provide the government greater control over money transactions as the digital yuan is completely centralized.
Digital Yuan to be Introduced in Macau in 2022?
Macau casinos are already preparing for new gambling laws and adjustments they will have to go through in 2022. Per Reuters’ report, one of those concessions will be about introducing the cryptocurrency run by the Chinese government. In mainland China, the digital yuan has already gone through a series of tests paving its way to full acceptance in the national economy. However, the potential rollout in Macau would mark the first occasion of China’s digital currency being used outside the mainland territory.
Macau Gambling Regulator Opposes Digital Yuan Introduction
Still, the introduction of the digital yuan may not go so smoothly. Last month, Macau’s gaming regulator announced that they were now exactly thrilled by the potential of bringing in China’s digital currency. The Gaming Inspection and Coordination Bureau, the body that regulates gaming in Macau, has denied reports that they plan to embrace the state-backed currency. The reports have previously stated that the regulator has already approached several casino operators and inquired about the feasibility of introducing digital yuan instead of Hong Kong dollars.
Still, as the Chinese Government increases pressure on the SAR.
The regulator may not have much say in the process. China sees the digital yuan as an instrument that will help get the financial market in Macao in order. At the moment, the Chinese feel that the current state of affairs results in hundreds of millions of dollars flowing out beyond its borders. They see the digital yuan as the key to stopping illegal money operations.
The Chinese Government Already Working on Introducing CBDC
Ho lat Seng, Macau’s chief executive, said recently that the city will likely have some interaction with a digital currency. However, he didn’t specify whether the said currency will be digital yuan. Right now, Macau is working with China’s central bank, the People’s Bank of China, on exploring the feasibility of issuing the digital yuan on its territory. The talks have been going on since April last year. In the meantime, the Chinese government has already made big steps regarding CBDC.
It’s estimated that more than $10 billion worth of goods and services in mainland China have been paid for with digital yuan.
The introduction of its own digital currency would allow Chine to keep track of the transactions and follow the money wherever it may go. Everyone using CBDC would also have to use the state-provided and approved crypto wallet. This way, all the transactions would be stored in one central depository and available for review at any time. Furthermore, it would also allow the government to easily freeze one or multiple wallets.