The Chinese central bank’s digital currency is expected to further amplify Macau’s declining gambling revenues.
According to an article from December 2 out BloombergJunkets – Macau companies acting as middlemen to get visits through China‘s high-roller gamblers – claim their customers are looking to other jurisdictions over concerns that the digital yuan will be introduced in Macau’s controversial gambling industry.
The report cites anonymous sources claiming that local casino operators have been approached by Macau’s Gaming Inspection and Coordination Bureau to discuss the feasibility of citing casino chip purchases in digital yuan, instead of Hong Kong dollars, as is currently the case.
The sources noted that popular digital payment platforms such as AliPay and WeChat are not being considered for use in Macau’s casinos as they will not help central government track capital flows.
However, on December 2 statement Macau’s Government Information Bureau claims that the rumors of discussions about “the use of digitized RMB in gaming casinos […] is wrong.”
Regardless, the rumors have sent shockwaves through the gambling industry in the territory, with shares in casino operator Galaxy Entertainment Group and Macau’s largest junket operator Suncity Group Holdings dropping about 3% each on the same day.
The introduction of the digital yuan to Macau casinos would pose a threat to the junkets industry, which generates significant revenues from the provision of Hong Kong dollar conversion and credit services. With Macau’s revenues down $ 27 billion during the pandemic, junkets are already feeling the pain.
China’s central bank would also gain more insight into the sources of the capital flowing into Macau’s gambling industry, which Bloomberg’s sources claim can deter many high-rollers – some of whom have previously been linked to China’s shadow banking system. Junket service provider, Eric, Leong told Bloomberg:
‘If the water is too clean, there will be no fish. The big gamblers will disappear when casinos have to be so transparent. “
Last month, Cointelegraph reported that China’s digital yuan would be tried in Suzhou district for the “Double 12” shopping event on December 12. During the shopping festival, hosted by e-commerce colossus Alibaba, participants will be given $ 200 in digital RMB through a raffle to spend during the day. The event will also try out the “offline” and “touch” functionalities of the CBDC wallet.
The pilot follows successful trials of the CBDC in Shenzhen that saw $ 1.5 million in digital yuan distributed by lottery to about 50,000 residents of the Luohu District to spend with more than 3,000 merchants in October.