The introduction of a digital version of the yuan currency into Macau, which is currently being tested by the Chinese government, could prove to be a long-term positive for the city’s nearly 40 casinos.
This is the opinion of Sanford C Bernstein Limited analyst Vitaly Umansky, according to a study from GGRAsia, two weeks after officials in the enclave announced that they would be amending local financial rules to allow for the full adoption of the blockchain-powered innovation.
According to the source, the People’s Bank of China will be in charge of the app-based “digital yuan” currency, which will enable the central government to track the movement of all cash and coins in circulation as well as the full details of goods and services purchased.
Problems with transactions
According to reports, Umansky said that such a development “should be a long-term positive” for Macau’s lucrative casino industry unless it became “the only way to actually buy chips” and was followed by “restrictive limits.” He added that the “digital yuan” might “be the icing on the cake for improving consumer experiences” by allowing properties to avoid “significant costs” associated with converting foreign players’ native currency into Hong Kong dollars.
According to reports, Umansky issued a comment that said: “The cleaning up of Macau’s money flows, easier access to renminbi transactions in the city and disintermediation of junkets would be a positive driver for continued growth in stable mass and premium-mass gambling segments.”
Following the Bahamas Central Bank’s similar move last year, China is said to be the second country to begin rolling out a digital version of its currency. This rollout is said to have started in late 2019 with a pilot in Shenzhen, Suzhou, Xiong’an, and Chengdu, before expanding in October to include the financial hub of Shanghai, the southern island province of Hainan, and the cities of Changsha, Qingdao, Xian, and Dalian.
Convenience for customers
According to reports, Umansky went on to say that Macau’s adoption of the “digital yuan” currency could enable gamblers to buy chips directly from a casino cage or instantly at a gaming table, and that it could even eliminate the need for chips entirely. The analyst also claimed that for those using the digital currency, ‘even Internet access may not be necessary,’ with potential gamblers only requiring a ‘hardware digital token smaller than a casino chip.’
Finally, according to reports, Umansky said that widespread adoption of the ‘digital yuan’ currency would aid Macau law enforcement officials in more effectively combating money laundering, loan sharking, and underground banks. Cross-border transfer stations are currently used by gambling enthusiasts in the city to exchange Chinese cash for Hong Kong dollars, but the advent of an electronic alternative could potentially spell the end of the WeChatPay and Alipay payment apps.