China was the country that introduced digital currency in 2014, and it was its first major market. The government completed the project and is now testing the digital currency across different cities.
Online casinos are here to stay. This means that more research will be done in the future on their effects on mental health, addiction rates, and overall well-being of gamblers compared with offline gaming options like casinos or brick n’ mortar parlors for gambling services.
The future of the world’s largest gaming market, China: how does it look? This and what is happening with their online yuan will be discussed in length.
What is the Digital Yuan’s Current Progress?
The Hong Kong Monetary Authority oversees the testing of the digital Yuan. Recently, the HKMA conducted a test between a bank merchant and a bank. They were chosen by officials from mainland China. It was tested in Shenzhen as well as other cities.
According to the HKMA, all tests that we’re able to measure cross-border payments and related app connectivity, as well as system connectivity, are complete. The HKMA has been in talks with the People’s Bank of China about a larger test.
However, the digital yuan (RMB) is still not ready for launch on a larger scale. It is however getting closer.
Next year, testing of the cyber currency will be intensified during the 2022 Winter Olympics. The cyber-currency could be then implemented nationally if it is successful.
What would the Digital Yuan do in Macau Casinos?
To accept virtual currencies, Macau needs to change its payment systems. It operates in the same way as other gaming markets do so it won’t be difficult for them at all.
Casinos in Macau attract gamblers by offering cash as the most popular way to gamble. The exchange rate for money is made up of coins, not bills because many people from China prefer mini-baccarat which involves playing with tiny monetary denominations and piles upon them instead.
China has an interesting way of using paper RMB in slot machines. To earn credits, players need to insert money and then use the cashout button that exchanges their bill or ticket for more Bamboo Roots (the country’s equivalent).
Gamblers will not be able to insert digital RMB directly into the machines or give it away as tokens. The system would allow casinos, though- they can receive virtual currency from customers who want access in return for playing their favorite game.
This is how cryptocurrency has been proven to work. To transfer Bitcoin, or any other currency to vendors customers scan QR codes.
The digital yuan however is not a decentralized cryptocurrency like Bitcoin. It gives the government, banks, and other institutions control over anonymity to allow for privacy adjustments.
The possibility of virtual currency machines being added to casinos’ table games is very likely. The technology modifications that were made to slot terminals allow them to accept digital dollars.
Potential Impact of the Digital Yuan
It is not yet clear how China’s cryptocurrency will circulate at Macau casinos. China is still testing its currency in its entirety.
The digital yuan will not be permitted in casinos. This would surely have an effect on Macau’s gambling sector.
China is strict about limiting the ability of mainlanders to transfer money out of China. Therefore, the junket sector grew.
Junkets are able to help Macau’s high-rollers by providing credit and recruiting them. Junkets are often casino hosts to ensure VIPs have the entertainment and amenities they desire.
High rollers accept large amounts of money to be placed in the casino throughout their stay. They will repay all gambling debts they have incurred as junkets upon their return to the mainland.
Junkets are loved by casinos for their ability to both recruit VIPs and collect debts. They are difficult to collect on behalf of casinos because they are situated on the mainland.
A digital currency might cause this imbalance. Since 2014 when President Xi Jinping slapped down on the industry, high-rollers are wary of Macau gambling.
Xi focused his crackdown on corruption in the country as well as its administrative areas. Concerning Macau – large numbers used Macau casinos as a way to launder cash.
These high-rollers quit Macau following the crackdown. Regular whales no longer visit Macau’s VIP casinos as they fear being considered criminal threats.
Junkets could disappear
With the possibility that Macau casinos will start accepting Chinese government-issued cryptocurrency, junket operators might have to rethink their roles in that market.
One of the most successful ways to attract high rollers from Macau is by organizing junkets. This would allow them not only to experience VIP treatment but also have access to complimentary food and drinks among other things.
Macau’s casinos would have a higher chance of success if they were to accept the digital Yuan. All transactions will be accessible to everyone, even those outside Macao who want in on this booming industry.
Regulators might be interested in a baccarat player who places 100,000 RMB per hand. Even though they are not suspected of money laundering their large bets may still be suspect in digital yuan.
What’s the hurry for Digital RMB
The Chinese government created the virtual Yuan for many reasons. It is determined to continue the anti-corruption crackdown that Xi started many years ago.
Authorities can have more access to transactions and be able to identify the purpose of digital currency transactions. This will result in a decrease in criminal activity.
Ho Iat Seng (Macau’s Chief Executive) made mention of this issue during his conversation with the Legislative Assembly. Ho said that Macau would like to increase its ability to prevent money laundering, tax dodgers, and other criminal elements such as terrorists in digital yuan.
Ho and other officials from the special administrative regions’ governments approached local casinos. They talked about the possibility of using digital Yuan to create casino tables and machines.
China is hoping to speed up cross-border transactions and reduce costs by implementing these controls. High fees are paid by many Chinese citizens to send money abroad.
For example, cross-border payments to Hong Kong can be costly for residents. They can run from $20 billion up to $40 billion per year. This represents 10% of the annual GDP.
The Good and Bad of Digital RMB
Zhou Xiaoshan, the former governor of PBOC. He asserts that the digital Yuan was not designed to replace any other currencies. Xiaoshan indicated that the yuan could also be used for investment and trading if it was available. “But we aren’t like Libra and don’t want existing currencies to be replaced in digital yuan.”
It is not yet clear if the yuan can replace all cash in China. Online casino might be allowed to use the digital RMB by the government.
It might also force Macau gaming establishments to accept the cyber currency. It is not clear how this will be handled.
It could be a benefit to Macau’s casino market if the digital yuan were only optional. Gamblers could save money by using the virtual RMB to purchase chips and play slot machines.
They won’t have any need to resort to other ways to get cash. Many gamblers purchase items from Macau pawnshops via electronic payment methods.
The pawnshop will then return the items to you in cash. 10% of the amount is retained by the pawnshop as a fee.
The Chinese government would have better tools to track gambling transactions. This could help curb criminal activity, but it could also cause privacy concerns.
We mentioned that high-rollers like we said, may not be happy being monitored, even though they aren’t doing anything wrong. Regular gamblers will not like increased government control over how their money is spent.
Conclusion of digital yuan
After the first few tests, it was clear that this new digital Yuan would be an improvement over its physical counterpart. Cyber RMB traders are excited about their prospects of being able to trade in large amounts with a little risk due to any cyber security risks involved!
As Macau casinos consider accepting virtual currencies, players may soon have the opportunity to use these crypto coins in playing slots at their casino.
With the different options for digital RMB acceptance, it is unclear how this will benefit or inconvenience Chinese consumers. Those who don’t want to use them can rest easy knowing there’s still a place where cash transactions are preferred.
The digital Yuan will be beneficial for Macau’s gaming industry. Gamblers might appreciate the change, and it should help to reduce costs in this area of business as well.