Gambling operators will soon be allowed to use cryptocurrencies

Malta’s gambling and gaming operators will soon be allowed to use cryptocurrenciees, the Malta Gaming Authority has pledged.

In a recent White Paper, the MGA pledged to allow its licensees to use crypto-currencies in the immediate future, describing them as “fast and cost-effective alternatives to traditional payment mechanisms”.

To ensure that a legal embrace of virtual currencies doesn’t lead to a rise in web crime or harm the reputation of Malta’s jurisdiction, the MGA has commissioned a detailed study.

The study, that will propose a legal framework with anti-crime safeguards, will be put up for public consultation towards the end of the year.

Meanwhile, the anti-money laundering directive is also currently being revised to include further provisions specific to crypto-currencies.

Prime Minister Joseph Muscat said in April that Malta will become one of the first countries in the world to embrace blockchain, the technology underlying Bitcoin and under crypto-currencies.

“This is not just about Bitcoin, and I also look forward to seeing blockchain technology implemented in the Lands Registry and the national health registries,” he said. “Malta can be a global trail-blazer in this regard.

“I understand that regulators are wary of this technology but the fact is that it’s coming. We must be on the frontline in embracing this crucial innovation, and we cannot just wait for others to take action and copy them. We must be the ones that others copy.”

The MGA and parliamentary secretary Silvio Schembri launch the White Paper

Blockchain activists: ‘MGA pledge just a small step’

Bitmalta, a newly-set up pressure group to advocate blockchain technology and virtual currencies, welcomed the MGA’s pledge but insisted it must only be the start of something larger.

“Since Malta prides itself as being one of the main hubs for remote gaming, it is only logical that it should support suppliers and operators alike in adopting one of the most promising technological advances of the last decade,” it said in a statement.

“However, this is just one small step which has been taken in progressing towards full adoption of the blockchain technology and cryptocurrencies, and possibly a late one at that.”

Bitmalta noted that jurisdictions such as the UK have already legislated in favour of the use of cryptocurrencies by remote gaming operators.

“Unless Malta wants to play second fiddle to such jurisdictions, it should ramp up its efforts to embrace such technologies by speeding up the process and employing the services of experts readily available in Malta who would be more than glad to aid Malta in repeating its resounding success achieved in 2004 when it became the first jurisdiction in Europe to successfully regulate remote gaming.

“The opportunity is ripe for such a historic advance, which would even dwarf what was achieved in 2004.”