Market Analysts Unsure If Digital RMB Proposal Will Benefit Macau’s Casino Industry
- China is pushing for wider adoption of its digital currency system – the digital RMB
- Macau casinos could be hesitant to use the digital currency due to privacy concerns
- Macau casinos reopened on July 23 but numbers remain low due to ongoing travel restrictions
As Macau explores the possibility of introducing a digital currency system, there are doubts as to whether it would work in the casino industry, with many customers raising concerns over privacy and future regulation of the digital currency.
Digital Currency has Privacy Implications
At the moment, mainland China authorizes the use of digital RMB, a digital version of its fiat currency issued by its central bank. It is currently being tested in multiple regions across the country, with Macau potentially joining the trial soon.
The Chinese government launched the digital RMB with the main goal of minimizing money laundering, illegal gambling, corruption, and terror financing. However, critics of the digital system are saying it will serve as a new tool for China to spy on the financial transactions of its people. This is the main issue right now for Chinese gamblers in Macau, according to two gaming scholars based in the city.
Zhou Jinquan, associate professor at the Center for Gaming and Tourism Studies at Macau Polytechnic University (MPU) has his doubts whether the digital RMB will benefit Macau casinos due to the privacy issues they raise.
Under China’s digital currency system, users will be required to use their real identities when creating accounts. The government will also have access to their transaction record which will make it easier for authorities to monitor money-laundering activities. Zhou said this particular aspect of the system won’t sit very well with Chinese players, especially those involved in VIP gaming as that means their transactions could be monitored.
Ricardo Siu Chi Sen, a business economics scholar from the University of Macau, said some customers are also concerned about the potential for the digital currency to be regulated, given its capability to be used for offline transactions. Authorities in Macau or those in mainland China, or both governments could introduce legislation to regulate the use of the digital RMB.
Customers currently use the printed version of the Hong Kong dollar when playing at Macau casinos, but casino operators can very well adopt the digital currency for the many benefits it offers, including enhancing business efficiency, according to investment analysts.
Macau Casinos Reopen but Low Numbers Expected
Macau casinos reopened on July 23, after nearly two weeks of being closed as part of measures to curb the spread of COVID-19. Gaming venues are currently operating at limited capacity and the numbers are expected to remain low as travel restrictions remain in place between Macau and the city of Zhuhai in mainland China.