(Kitco News) - The Executive Council of Macau has completed its review of a proposed law that lays out the regulatory framework for the legal standardization of all currencies in the region, including digital currencies, and submitted it for consideration to the Legislative Assembly.
The law, entitled “Legal regime for the creation and issuance of money,” seeks to make digital currencies legal tender and subject to regulation in the autonomous region on the south coast of China that is known as the gambling hub of Asia.
Once passed, currency with legal tender in the Macau Special Administrative Region (MSAR) will now include digital assets, which have been granted the same status as traditional currencies and will be regulated by special legislation.
The proposal also calls for a “new topology of banknotes” that will help “properly distinguish between banknotes intended to mark relevant events and banknotes in current use for general circulation purposes.”
The establishment, circulating supply, type, and other features of currencies will now fall under the purview of administrative regulations, along with the issuance, scope, and introduction of new forms of digital currencies.
Merchants and transportation operators will be required to accept digital currencies as legal tender under the new legislation, with the refusal to do so constituting an “administrative offense” that could result in a fine of 1,000 and 10,000 Macanese pataca (MOP), which translates to $123.70 and $1,237.
Finally, the bill amends the procedure for withdrawing currency from circulation and requires issuing entities to “maintain the obligation to accept and exchange the currency to be withdrawn from circulation.”
The bill's overall goal is to apply updates to the region’s regulatory system, which was established in 1995, and align its economic and legal agendas with Hong Kong and Mainland China.
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The new bill comes as China has made significant strides in the development of its central bank digital currency (CBDC), the e-CNY, which could be integrated into the ecosystem of Macau to help combat money laundering and tax evasion.
Integrating the digital yuan would act as a deterrent for bad actors in the gambling sector and help to simplify the management of currencies as physical notes would be replaced with their digital counterparts.
In December 2020, several casino operators in the gambling mecca were invited to discuss the feasibility of purchasing gambling chips with the e-CNY, aligning with China’s broader efforts to integrate a common digital currency across Hong Kong, Macau, and Guangdong.
