Macau's gambling market could possibly face a fundamental realignment as the local government aims to move closer to legalizing the use of China's digital yuan in casinos.
On Tuesday April 14, Macau's Chief Executive Ho Iat Seng told the Legislative Assembly of plans to "study the feasibility of issuing a digital currency." The government of China's "special administrative region" wishes to boost its ability to deter tax dodgers, money launderers, and other criminal elements, including terrorists.
The gambling hub of Macau is still deemed the main engine of the local economy, and according to a Bloomberg report, government representatives had talked to many Macau casino operators about the possibility of allowing gamblers to buy casino chips with the use of digital yuan.
Brokerage Bernstain said, "If the RMB were to become legal tender in Macau, then the path is opened to usage of Digital RMB as well. In the context of casinos, this would mean for example being able to buy chips for play directly from the casino cage (or even a table) instantly using (digital) RMB without the need to convert into HKD."
Last year, China started testing its digital yuan project in Shenzhen, and it went well enough that the government expanded the pilot project to include other cities and a growing number of businesses. Unlike most digital currencies, the digital yuan lets the People's Bank of China to trace all transactions back to its individual users, lowering the chances of the currency being used for illegal purposes.
The theory is that the use of the digital yuan in casinos would increase "mass market" gamblers' ability to use their mainland savings without having to go through illegal channels like shady financiers and pawnshops. However, their activity would be under scrutiny by mainland authorities, the impact of which may negate any possible benefit.
It remains to be seen whether Macau may simply let its casinos place the option of adding the digital yuan to their list of funding choices or whether the digital currency would become the only acceptable option. The latter can have a significant impact on local junket operators, with a knock-on negative for the casinos themselves.
The plans could see instant transactions for players at the casino in the future. At this time, players must convert their Chinese RMB currency first into HK$ or Macau Patacas (also known as MOPs).
Source:
https://www.highstakesdb.com/7501-macau-hoping-to-legalize-cryptocurrencies-following-china-trial.aspx
https://www.bloomberg.com/news/articles/2021-04-14/macau-moves-step-closer-to-digital-currency-in-threat-to-casinos
