On Friday, the Executive Council of Macau announced its outlook on digital currency and its use in the area. Macau is a special administrative city in China and is well-known for its casino industry.
The Macau-China relations have been a significant part of global history. In 1999, Macau returned to Chinese sovereignty from the Portuguese administration and has been recognized as a special administrative region of the People’s Republic of China. Its foreign relations and defense are the responsibility of China. However, China grants Macau considerable autonomy in economic and commercial relations.
In a recent announcement by the local administration, Macau plans to accept digital currency CBDC as a legal tender. However, the definition of digital currency in the legal tender hasn’t named any specific digital currency, nor has it established a deadline for when it will be accepted.
The legal tender is expected to help the city’s economic and legal ties with the mainland boom, considering the announcement following China’s progressive strategy towards CBDC by encouraging the digital Yuan or e-CNY.
To strengthen the CBDC system “relying on national technical strength,” Lei Wai Nong, the secretary for economics and finance, stated in June that Macau is looking to China’s experience in creating the digital Yuan to perhaps create its own CBDC. However, the use of CBDC in the city’s casinos has been a topic of suspense among the people considering the industry’s ability to yield about half of the city’s GDP at about $28.1 billion, as estimated in 2019.
The announcement also talked of the bill “Legal Regime for the creation and issuance of currency,” which is regarding the issuance of CBDC. The bill seeks to penalize the denial for accepting the legal tender as an administrative offense and having fines ranging from 1,000 MOP ($123.70) to 10,000 MOP ($1,237).