On September 27, 2017, the Monetary Authority of Macau (AMCM) published a notice that banks and payment providers in the autonomous region of China must avoid cryptocurrency customers. Financial institutions are barred from working with cryptocurrency businesses and entities pursuing token offerings (also called ICOs). Banks and payment providers are also forbidden from participating in such activities. In the English version of Wednesday’s announcement, the AMCM recounted its previous statements about virtual currency. In a 2014 press release, the regulator declared that bitcoin is “a type of virtual commodity which is neither a legal tender nor a financial instrument subject to supervision.”
A gambling paradise, Macau is located on China’s southeastern seaboard. As the only region in China where gambling is legal, Macau receives an eye-popping 50 percent of its revenues from gambling tourism. At present, at least one company is attempting a multi-million dollar token offering for a gambling-related venture in Macau. Now that Macau’s financial institutions cannot support cryptocurrency businesses, early-stage crypto companies face a significant hurdle.
The AMCM’s proclamation closely follows mainland China’s restrictions on cryptocurrency. At the outset of this month, the People’s Bank of China and other government agencies declared a blanket ban on ICOs. Companies that had undertaken token offerings were mandated to return funds to investors – so far, about 90 percent of Chinese token offerings have reportedly complied with the order. Although over-the-counter cryptocurrency trade persists, Chinese authorities have forced an end to trade on exchanges. As Chinese cryptocurrency exchanges wind down their activity, the government has effectively instituted a travel ban on the exchanges’ executives.