Macau May Become Proving Ground for China’s Digital Yuan
Posted on: January 5, 2022, 07:04h.
Last updated on: January 5, 2022, 09:41h.
The year 2022 is going to bring about a number of changes to Macau’s gambling industry. One of the most notable could be the inclusion of China’s central bank digital currency (CBDC), the digital yuan.
The new year is going to bring new gambling laws and new concessions to Macau’s casinos. If a report by Reuters is accurate, it could also bring the introduction of China’s state-run cryptocurrency.
The digital yuan has already begun its path toward acceptance in China, with a number of isolated tests introduced. However, if it were rolled out in Macau, it would be the first instance of the currency being used in an ecosystem outside the mainland.
Macau’s gaming regulator stated previously that it wasn’t thrilled about the idea of bringing in the digital yuan. However, at this point, with China exerting more pressure on the SAR, the decision may be out of the regulator’s hands.
While watchdogs have much to win, and operators have less to lose, 2022 will be the year the new currency comes to casinos,” Reuters journalist Katrina Hamlin states.
China views the digital yuan as a possible solution to illicit money operations and the outflow of hundreds of millions of dollars beyond its borders.
Cause for Concern
Macau’s chief executive, Ho Iat Seng, said earlier this year that some type of interaction with digital currency was likely in the city. He didn’t acknowledge that it would be the digital yuan.
Macau began to work with China’s People’s Bank of China, the country’s central bank, to “study the feasibility of issuing a digital currency.” That began in April of last year. Since then, China has made a lot of progress with its CBDC. Reuters indicates that over $10 billion in goods and services has been purchased in the mainland using the digital yuan.
Bloomberg pointed out last year that, according to insiders working with the CBDC project, the introduction of the digital yuan in Macau would give China greater ability to see money movements in the SAR. This would also see junket operations decline further, which is also on China’s agenda.
China would be able to follow the money trails wherever they go. A state-provided cryptocurrency wallet would be mandatory for use with the CBDC. This creates records of all transactions in a central repository that can be reviewed at any time.
It would also give the government the ability to freeze one – or multiple – wallets with just a few keystrokes.
Digital Currency Not Inherently a Foe
Digital currencies, including bitcoin, stablecoins, and CBDCs, don’t necessarily have to be evil. Just like anything, it’s all in how they’re used.
Digital cash, in one form or another, is going to become more prevalent in all industries, including gambling. Star Entertainment in Australia is taking a closer look at digital currencies to make financial and gambling regulators happy.
Similar results are found in other jurisdictions as well, including the US. Cashless gaming is beginning to take hold. While solutions such as those offered by Sightline and competitors are not specifically digital currency, they show how easy it is to use digital cash to gamble.
Wyoming was the first state in the US to legally approve cryptocurrency for sports wagers. Resorts World Las Vegas accepts cryptocurrency, as well.
The difference between those and China’s solution, though, is they are truly decentralized. China’s digital yuan is completely centralized. The government having greater control over spending than it does with the paper alternative.
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