Macau to Unveil Prototype Digital Currency by Year’s End

Posted on: September 23, 2024, 12:34h. 

Last updated on: September 23, 2024, 12:44h.

Philip Conneller @casinoorgphilc Read More

Expertise: Gaming Business, Regulation, Tribal Gaming.

Macau will develop a prototype “digital Macau dollar” by the end of the year, according to the Special Administrative Region’s (SAR) monetary authority (AMCM).

The currency is likely to mirror the so-called “digital yuan,” also known as Digital Currency Electronic Payment (DCEP), which was cautiously rolled out on the mainland in 2020. That means it would be backed by the People’s Bank of China and controlled by the central government in Beijing.

“To ensure the security and stability of the monetary system of Macau, the AMCM will conduct sandbox tests with the prototype system to explore the application scenarios of the Digital Macau Dollar,” the authority said, as reported by Inside Asian Gaming. “It will carefully examine various types of risks, so as to formulate complementary rules and regulations that suit the actual market situation in Macau, and to properly prepare for the official launch of the Digital Macau Dollar in the future in all aspects,” the AMCM added.

Government Control?

China was the first major economy to create its own digital currency, which is still undergoing public testing. Some see it as the early stages of a future cashless society, which could be a way of exerting increased government control and surveillance over users and their financial transactions.

Currently, there is a US$50K annual cap on the amount of cash citizens can take out of mainland China. Beijing has engaged in a crackdown on money laundering and capital flight, which has moved from targeting Macau’s casino junket industry to illegal money-exchange businesses.

It’s estimated that up to US$600 billion is taken out of the Chinese economy by Macau-bound gamblers each year.

The People’s Bank of China has said the digital yuan will be used to reduce money laundering, gambling, corruption, and terror financing, and may improve the efficiency of financial transactions. It has also stated its goal is not to replace cash completely.

Silver Lining

While a digital economy would decimate the VIP segment on which Macau once relied, it could finally fulfill Beijing’s long-cherished dream of eliminating capital flight. That may, in turn, abolish the need for capital controls, increasing the spending power of mass-market visitors to Macau casinos.

Sam has expressed the opinion that the casino industry needs to “reform and innovate” if Macau is to meet its political and economic challenges.