Macau’s government is preparing to introduce a digital currency to combat tax evasion and money laundering in the gambling hub. On April 13, Ho lat Seng, the chief executive officer of the Chinese island territory, told local lawmakers that the government is planning to amend legislation to allow the regulated issuance of China’s digital yuan (DC/EP) to facilitate trials of the digital currency in the region.
Regulators to start a feasibility study around launching the Digital RMB in Macau.
The chief executive officer of the Chinese island territory said, “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 digital yuan’s introduction will help Macau in its fight against tax evasion and money laundering. The digital yuan introduction could potentially overthrow Macau’s pataca as the main currency, especially if authorities decided to make its use mandatory.
Digital yuan would allow greater government scrutiny and control over money flows.
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,” the analyst noted. 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 national digital currency could help with Macau’s road to recovery. The People’s Bank of China has already conducted several successful trials of digital yuan.
