Tag: MACAU

Macau Likely to be Test Bed for China’s Digital Yuan: Reuters

by Blockchain News

Macau is expected to be a testbed for China’s digital yuan, also known as the e-CNY, as casino owners prepare to bid for new licenses in the city for the first time in two decades.

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Chinese regulators will be looking forward to using the casino licensing opportunity to test the digital yuan in 2022, Reuters reported.

Among many other casino companies in Macau, Sands China and Wynn Macau have shown eagerness to participate in the government’s plan.

The government authorities have also pitched ideas like appointing agents to supervise daily casino operations, according to Reuters.

Last November, when central bank governor Yi Gang suggested China’s newly developed cryptocurrency could be useful for fighting crime such as money-laundering and resolving complex cross-border payments problems, Macau might be one of the options in his pocket list.

In addition, in December, junket operator Suncity’s boss Alvin Chan was implicated in a probe into illegal gaming. Suncity facilitated bets for wealthy VIPs, a market segment worth around $8 billion in gaming revenue the year before COVID-19 struck, Reuters reported.

Using Macau as a testbed for digital payments would benefit Beijing’s desire for greater oversight of cash flows and customers and since the casino hub is situated outside Chinese capital controls, the city is considered an ideal place to test the technology before rolling it out more widely in the mainland.

According to Bernstein analysts estimate, the average high roller lost over $27,000 on each visit to the tables in Macau.

A senior Chinese central bank official said that some 140 million people had registered “wallets” for the new digital yuan as of October and used it for transactions totalling around $9.7 billion, according to a Reuters report from November 2021. 

Although 2022 is likely to be the year for e-CNY, no official launch date for the digital currency has been announced yet.

Since China’s ban of decentralised cryptocurrencies like Bitcoin, the digital yuan is predicted to substitute them.

According to a Blockchain.News report, China implemented its zero-tolerance policy for Bitcoin mining in May 2021, with a series of crackdowns on miners that finally led to the exodus of mining firms from the Asian nation. Beijing’s negative stance about crypto miners is fueled by the supposed environmental impact as the majority of the nation’s power source comes from coal.

Eventually, Chinese miners have found the right footing by relocating to other areas like the United States.

Image source: Shutterstock

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Macau poised to amend laws to enable digital yuan trials

by Cointelegraph

Macau is pushing forward with preparations fo the roll out China’s digital yuan, which could help crack down on tax evasion in its opaque gambling industry.

On April 13, Ho lat Seng, the chief executive officer of the Chinese island territory, told local lawmakers the government is planning to amend legislation that would allow the regulated issuance of China’s digital yuan to facilitate trials of the digital currency:

“We will keep communication with the People’s Bank of China and start a feasibility study around launching the Digital RMB in Macau. Therefore, we need to add provisions in relevant law to allow for the introduction of digital currencies.”

According to Ho, the introduction of digital currency will aid Macau in its fight against tax evasion and money laundering. The introduction of the digital yuan could potentially overthrow Macau’s pataca as the main currency, especially if authorities decided to make its use mandatory.

Analysts at brokerage firm Sanford C. Bernstein emphasized the increased government scrutiny that monetary flows in China’s Digital RMB will face:

“Digital RMB would allow greater government scrutiny and control over money flows. But it would also allow easier money transfer.”

Junkets are middlemen who provide Hong Kong dollar conversions and credit lines for high rollers in Macau. They reportedly hold concerns over the adoption of China’s fully traceable digital currency and believe the move could scare off high rollers, some of whom have alleged underworld ties, to other jurisdictions. This may do significant harm to a gambling industry already reeling from the impacts of travel restrictions induced by the global pandemic.

It is reportedly difficult for the Chinese and Macau governments to track taxable revenue in the industry, but according to Reuters, gambling revenue hit $36.5 billion in 2019, with the junket industry responsible for 50%.

Despite their concerns, others believe the adoption of China’s digital yuan could help with Macau’s road to recovery. Victoria White of Inside Asian Gaming noted on April 2, that the adoption of the digital yuan could facilitate the movement of money for the large number of Chinese tourists who travel to the gambling hub each year, as it removes the need for currency exchange and its associated costs:

“Ultimately, this could boost overall consumer spending in the mass and premium mass markets, which are the precise segments that have been most affected by the drop in footfall and visitations since the start of the COVID-19 pandemic.”

The PBoC has conducted pilot trials of the digital currency in several cities across China since late 2019. It is exchangeable on a one-to-one basis with the yuan at some ATMs. While a digital currency is nothing new for an already relatively cashless economy, aided by the use of apps such as WeChat and Alipay, the move into a nationally recognized virtual currency increases the CCP’s ability to monitor its citizen’s financial activity.