Posted in Industry October 3, 2018
Uniform Standards for Cryptocurrency Use in Online Gambling
Cryptocurrencies and the use of Bitcoin as alternative currencies are generating a lot of attention nowadays, and all for the right reasons. The great thing about the use of cryptocurrencies is that these offer individuals and investors with privacy when it comes to transactions. With cryptocurrencies, users can count on the anonymity and privacy of transactions. Customers can also rely on lightning fast transactions, with many websites processing these transactions instantaneously. While the traditional purchases and payments take 1 to 3 days, crypto-based transactions are completed immediately. While these cryptocurrency adoption is growing online in different industries, there’s one industry that’s sluggish when it comes to adoption and use – the online gambling industry.
Also, read our previous post about this subject – “Will 2018 Be the Year of Cryptocurrencies in Casinos”.
Risks, ‘Grey Areas’ as Reasons Why There’s Poor Adoption of Cryptocurrency for Gaming
There are some online casinos and gaming portals that accept cryptocurrency, but its use is not widespread, leading many industry players to speculate on the future and the possibility of cryptocurrency mainstream use. Lars Lien of LuckBox is one interested follower of the cryptocurrency use for online gaming, and has shared his thoughts on a number of things, including the prospects of cryptocurrency for gambling use and reasons why big banks are still slow to fully embrace the technology. According to Lien, payment processors and banks have the right skills that can work for the cryptocurrency and gambling industry. However, these financial institutions are faced with specific challenges and risks that stop them from fully embracing the technology.
So the reality is, right now, if you’re a big operator, you simply cannot use cryptocurrencies, because the payment processors and your banks will go, ‘Well, we don’t understand this from a compliance and AML [anti-money laundering] point of view. We’re not going to do it.’ And when you’re a large incumbent, you can’t take those type of risks.
With no specific rules governing money laundering and transfer of funds, financial institutions are left with no choice but to play it safe to protect their interests. Lien added that the large companies like Bet365, PokerStars and Betsson are not expected to take the risks that will only give them small gains.
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What’s Next for the Online Gaming Industry?
So what will make the industry use and adopt cryptocurrencies for the payment of gaming services and related transactions? According to Lien, the formal and widespread use of the cryptocurrency in the online gaming market is only possible if the industry decides on uniform standards. For example, if there’s procedure to confirm about the nature of cryptocurrency whether these are fully AML – compliant, or banks will know the source of these funds, then it will be easier to adopt cryptocurrencies as traditional currencies.
In the same interview, Lien added that “If we could find a way to integrate or to have the knowledge of who owns the coin, ‘Where has that coin been, is it associated with terrorist financing? Probably not.” In short, what the industry needs is a set of rules that will govern its use and adoption and complete transparency. And in the words of Lien, if only all industry stakeholders will do these together, large operators will have the reasons to support and adopt the use of cryptocurrency in the online gaming niche.
To learn more about all of the different casino payment methods, their requirements on deposits and withdraws, how to best make use of them, and their pros and cons; please read our complete guide!