According to a report by Reuters, Macau will be a test site for China’s digital yuan also known as e-CNY. Following this, casino owners prepare to bid for new licenses in the city for the first time in two decades.
In October, last year China’s government declared all cryptocurrency transactions illegal. Adding to that it also banned citizens from working for crypto-related companies.
There were rising concerns about an unregulated market since it may lead to various illicit activities within the country. Furthermore, there was also an issue of environmental impact as the majority of the nation’s power source comes from coal.
According to a fresh report by Reuters, Chinese regulators will be looking forward to using the casino licensing opportunity to test the digital yuan in 2022.
Major casino companies in Macau, like Sands China and Wynn Macau, have shown eagerness to participate in the government’s plan.
China’s digital Yuan is an attempt to keep illegal activities in check
After a month, when the government banned all the cryptocurrency transactions, the central bank governor Yi Gang suggested China’s newly developed cryptocurrency could be useful for fighting crime. This includes money laundering and resolving complex cross-border payments problems. Among his pocket lists Macau might be one of the options to test the digital currency.
Following the popularity of cryptocurrencies around the world many applications began to arise. People of China also started to accept cryptocurrencies in their daily life until the government made them illegal. With its large-scale use, some organizations used cryptocurrencies for various unsolicited activities, according to reports.
For instance, in December 2021, Junket operator Suncity’s boss Alvin Chao was implicated in a probe into illegal gaming. Suncity facilitated bets for wealthy VIPs, worth around $8 billion in gaming revenue the year before COVID-19 struck, as reported by Reuters.
The Government doesn’t want to dump the idea of cryptocurrency completely as it wants to test its own digital currency. According to the officials, Macau is an ideal place to test the technology before rolling it out more widely on the mainland. Using Macau for digital payments would benefit Beijing’s desire for greater oversight of cash flows and customers as the location of the casino hub is outside of Chinese capital controls.
Meanwhile, the government authorities have also pitched ideas like appointing agents to supervise daily casino operations.
Why China can’t give up on the e-CNY ?
The average high roller loses over $27,000 on each visit to the tables in Macau as reported by Bernstein analysts.
According to previous reports, about 140 million people had registered “wallets” for China’s digital yuan by October 2021. The total transactions as of November were $9.7 billion.
According to predictions, 2022 will be the year for e-CNY, though there are no announcements of any official launch date for the digital currency.