Macau Chief Executive Ho Iat Seng says the government is planning to amend its financial laws to allow for the introduction of China’s Digital RMB in the future.
Ho told the Legislative Assembly on Tuesday that digital currencies were becoming globally accepted and that it was imperative Macau follows suit given the mainland Chinese government has outlined its intention to release a Digital RMB following pilot testing in several cities recently.
“Although Macau has not yet reached this process at this stage, we should follow the pace of the mainland government,” he 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.”
China took its first steps towards a Digital RMB in late 2019 via a pilot program in Shenzhen, Guangdong, Suzhou, Chengdu, Sichuan and Xiong’on New Area.
The People’s Bank of China revealed this week that is has now expanded the program to six more cities – Shanghai, Changsha, Xi’an, Qingdao, Dalian and Liaoning – as of October 2020.
The pilot programs for China’s Digital RMB have included general living payments, catering, transportation, expenditure and government services. However, the timetable for the launch of the Digital RMB as an official currency in mainland China has not yet been confirmed.
As previously reported by IAG, China’s Digital RMB has the potential to be a game-changer for Macau by overhauling entire payment systems, reducing reliance on payment apps such as WeChatPay and Alipay and potentially replacing the pataca as Macau’s main currency.
“If the RMB were to become legal tender in Macau, then the path is opened to usage of Digital RMB as well,” said Brokerage Bernstein in a recent note.
“In the context of casinos, this would mean for example being able to buy chips for play directly from the casino cage (or even a table) instantly using (digital) RMB without the need to convert into HKD.
“The elimination of the need for currency conversion from the key Macau customer group (mainland Chinese) would be advantageous as it would simplify the process and not subject customers to f/x transaction costs.
“Digital RMB would allow greater government scrutiny and control over money flows. But it would also allow easier money transfer [and] eliminate the need to use intermediaries (like junkets, underground banks or pawnshops).
“Mass and premium mass play could surely benefit due to ease of money flow.”