The digital Yuan’s adoption is gaining traction, putting China at the forefront in State issued cryptocurrencies. The government of China’s island territory of Macau is in the process of introducing the digital currency. The goal is to help the island catch tax cheats and fight other crimes such as money laundering.
According to the Island’s Chief Executive Officer Ho Lat Seng, the government already has plans to change the law and create an enabling environment for China’s digital currency trials. Ho added that they would be in touch with the Chinese Central Bank for the process of starting a trial study of the digital Yuan. If fully introduced, it would be a replacement of the Island’s current currency, the Pataca.
The implications will be increased scrutiny of monetary flows in and out of the island. According to an analyst at Sanford C. Bernstein, the digital Yuan will allow the Chinese government to scrutinise and have full control over the island’s money flow. However, the advantage is that transactions would be much faster than they are today.
As things stand, both the Chinese and Macau governments cannot fully control transactions in and out of the city-state. That’s because intermediaries, popularly known as Junkets, largely control the transactions.
This group is responsible for helping gamblers convert Hong Kong dollars to Macau currency. Naturally, the move to shift transactions to the digital Yuan has not to sate well with the Junkets, who account for over half the island’s revenues.