According to a statement released by Macau’s Executive Board three days ago, the nation’s council has passed a bill to the general regulatory agency to make digital currencies a legal tender, with the draft believed to be deliberated by the Legislative Council. The proposed legislation, titled “Legal regime for the creation and issuance of currency,” would make central bank digital currencies (CBDCs) get accepted as legal tenders but subject to regulation.
However, the Legislative Council has yet to announce the timeline for the approval process. The bill also revealed that the circulation supply, establishment, type, and other properties of digital currencies would be checked using administrative regulations. The regulations will also apply to currency issuance and other aspects of digital currencies.
Also, transportation workers, operators, and merchants must start accepting digital currency payments to accommodate the new currency legislation. Those who decide not to accept the new rule will be considered disobedient and subject to a fine of around 1,000 and 1,000,000 Macanese Pataca (MOP), equivalent to $123.7 and $1,237, respectively.
The bill from the Executive Council also indicated that issuers of the currency would have to change the reclaim procedures to collect or change any reclaimed currencies.
Potential Implementation Of The Digital Currencies In Macau
According to an announcement made by Macau’s Chief Executive Ho Iat-Seng on April 12, 2021, integrating a national digital currency will help fight against illegal money transfer and tax evasion as they are working with China to remove such activities in Macau.
As the world’s biggest center for gambling casinos, the bill will make it mandatory for central bank digital currencies to be used as the primary payment method in Macau’s casinos. The city is known as the “gambling capital of the world,” with its gambling sector contributing over half its GDP at about $28.1 billion in 2019.
However, the new legislation will remove bad actors in the gambling sector. Many casino operators were invited in December 2020 to discuss the possibility of purchasing gambling assets with the CBDC.
This bill is in line with China’s move to start using a national digital currency across the cities of Hong Kong, Macau, and Guangdong. The government of China is currently working to create the digital Yuan that will also be accepted as a legal currency in the country. Other countries are also making similar moves to help sustain their economy and explore the cryptocurrency industry.