Macau is about to launch a digital currency which will be the first for a government. The Macau Monetary Authority plans to conduct a public demonstration of the prototype system by the end of the year. Studying this test could be a worthwhile exercise for the U.S. government.
E-mop is the colloquial term for the digital version of Macau’s Pataca. Under a 2023 law, it will have the same status in the eyes of the government as the Pataca. Agreements have already been made with the central banks in many countries to recognize the digital currency. The U.S. Federal Reserve isn’t on this list yet, but if e-Mop is successful, this could change.
An official digital currency in the United States could have benefits for many businesses, including online casinos. Today, it is easy to download a legal casino app and play games of chance on a mobile device in various U.S. states.
Digital currency is theoretically possible in the U.S.
In the U.S., for a digital currency to be accepted by both the federal government and states, it would need to be launched by the congress. A tokenized and blockchain-based version of the dollar would need regulation by the federal government.
The government would have to determine that a central bank digital currency (CBDC) is safe. For example, it shouldn’t have credit and liquidity risks. The private sector would have to provide infrastructure like accounts and digital wallets. This would make identity verification, privacy protection, and transferability possible. At present, it appears that very little attention has been given in the U.S. towards the creation of a digital currency.
Technological advancements have significantly impacted various industries in the U.S. For instance, the use of blockchain technology across industries incentivizes participation, gives a sense of accomplishment, and encourages continuous engagement. A digital currency could even improve the user experience for players in online casinos.
Benefits of digital currencies
A digital dollar could streamline online gambling transactions which could become cheaper, faster, and more accessible across state lines. This could put pressure on states to harmonize their gambling laws to make cross-border transactions easy.
Another potential upside of a digital currency would be the traceability of blockchain transactions. This could help with the recovery of fraudulent transfers and reduce money laundering.
In the digital finance market, the use of mobile money accounts assists in closing the gender gap in regions with great access disparities. This can help build a more equitable and inclusive financial system.
Challenges of digital currencies
Systems security is a top concern. A CBDC would require strong encryption and cutting-edge cybersecurity measures to protect against cyber threats. This is especially important in online gambling where customers provide their confidential financial information.
One of the main challenges of a digital dollar would be implementation and how to integrate it into current payment systems. Online gambling platforms would need technical upgrades, and they would have to partner with payment providers that support digital currencies. Educating consumers about the use of digital currencies would also be critical for adoption.
In the beginning, an increasing level of oversight would be necessary, and this could be an onerous burden for casino operators. Federal legislators could also impose some restrictions on using digital currency for gambling which would complicate things for online casino operators.
Will there be a U.S. digital currency in the future?
There could be a U.S. digital currency in the future, but it is likely to only be decades from today. At present, online casino operators have more pressing concerns. If using digital currency in Macau is successful, it could put it on the radar of other countries. In the U.S., it could have various benefits, but implementing it would require overcoming many technical and legal challenges. Taking a proactive approach to the issue could result in a better system. One of the main challenges is execution, and this would require a balance between compliance and innovation.