Many countries are taking steps to create a digital currency to meet various local needs. The world has found digital currencies more attractive due to impressive inputs from some of the world’s most influential countries like the US, Switzerland amongst others.
Macau, one of China’s regions, is the next to take the bold step of utilizing the digital yuan, and this is for preventing tax evasion and money laundering. Money laundering is a problem many countries face as they try to find ways to combat social vice. This has necessitated Macau’s move to roll out China’s newly created digital yuan to combat tax evasion problems in its gambling hubs.
Macau to introduce digital yuan for anti-money laundering schemes
One of China region’s officials, Ho lat Seng, explained to the territory’s lawmakers that there would be some amendments in the area’s legislation to allow the issuance of China’s digital yuan, which would help the region commence its digital currency trial.
The official explained that it would keep communication with China’s central bank, which would help the area commence plans for Macau’s digital currency creation. He added that the amendment has to make space for the introduction is digital currencies, which would allow the region to start its plans.
Ho explained that if Macau uses digital currency, the region will find a way to combat money laundering and tax evasion, one of the area’s most significant issues. Sources explained that if Macau uses the digital yuan, it could overthrow the region’s official currency. Once it becomes mandatory, its money flow would be transparent, and the government can restrict its gambling hubs.
The new plans have attracted some opinions as experts at Sanford C. Bernstein opined that RMB would allow some scrutiny from the government. The analysts said that the digital RMB issuance would allow transparency in terms of money flow and scrutiny while still allowing easy money transfer.
Experts predict growth for Macau following the adoption
Junkets have shared their growing concerns about the growth of the digital yuan and its adoption while adding that it could affect high-rollers, and some sources claim that these people have ties with some underworld authorities.
This would negatively affect the gambling industry that is already facing huge problems from traveling restrictions, and this movement would discourage people within the industry. The two Asian regions, China and Macau, have faced tax evasion issues, and experts believe that the introduction of digital currencies could reduce problems associated with that effect.
While the regions’ gambling sectors remain opaque, Reuters data from 2019 shows that the gambling industry is worth around $35 billion and that Junkets dominate the growing sector. Still, analysts see this as a good plan for Macau as they believe that the region would keep tabs on its taxation and assure people within the area pay taxes.
It’s safe to note that the digital yuan’s adoption could help make the region more attractive for Chinese investors going into Macau for gambling as it reduces the problems with currency conversion.