After a report by Bloomberg that Macau’s casinos will replace FIAT currency with e-yuan, the city’s gambling regulator has denied the rumors outright.
No E-Yuan for Macau’s Casinos, Says Regulator
A recent report by Bloomberg has suggested that the Gaming Inspection and Coordination Bureau (DICJ) in Macau may be preparing to introduce the e-yuan as a currency option for the special administrative region’s gambling industry in the hopes of stemming gambling capital outflow.
The regulator made a public statement that no “early talks” about the adoption of e-yuan as a potential substitute of FIAT currency had been discussed by authorities, and that the report was false.
In Bloomberg’s report, the media argued that people close to the matter were privy to details about an upcoming shift in the gambling industry in Macau, possibly as part of a broader effort to crack down on illegal gambling.
Bloomberg seemed to suggest that chips at physical casinos would be eventually purchased with e-yuan, controlled by the People’s Bank of China. Even China was to see to it, Macau would need to roll some regulatory framework to bind the use of e-yuans.
In the meantime, the central bank has announced plans to equate the e-yuan to the physical yuan, and making another step towards the digitalization of its economy. An experiment is already under way in Shenzhen and Suzhou.
Presently, players in Macau pay mostly in Hong Kong dollars, and it seems that will remain the case for a while. According to Bloomberg, if an adoption of the e-yuan were to happen, it would have happened only on the premises of the city’s casinos.
In the meantime, Macau is trying to diversify away from its dependence on gambling revenue, with a series of moves announced for 2021.
In a sense, introducing the e-yuan could make sense, as right now Chinese gamblers need to convert physical yuan in Hong Kong dollars before they can play. Should everyone switch to e-yuan, authorities will be able to track payments, albeit the argument may not hold particularly strong in the case of Macau where gamers come to play in person.
Ideally, China would want to be able to stop junket operators from ferrying people to potentially dangerous destinations. Kidnappings of Chinese nationals in Southeast Asia (SEA) have been common place and China has been forced to come down hard on operators trying to lure gamblers away from the comfort of Macau.
However, Eric Leong, a junket service provider, said that the industry can’t get too upright. If the water gets too clear, Leong argued, the big fish would go away. Nobody wants the industry to be that transparent, he concluded cited by Bloomberg.