The Malta Gaming Authority (MGA) has issued a document that explains new measures that will be implemented regarding the use of blockchain technology and cryptocurrencies in the gaming industry. The document is currently open and the watchdog is seeking public feedback before it becomes law.
The authority explains the need to protect consumers, and prevent money laundering and other forms of crimes that come with the currently highly-unregulated world of blockchain-based gaming. The new measures also seek to protect Malta’s reputation, saying that the criteria set out in the paper will inform a planned regulatory sandbox environment. It is expected that this sandbox could result in new regulations for Malta’s gaming ecosystem.
Approval of Cryptocurrencies
Notably, companies that want to use cryptocurrencies will have to satisfy various conditions, which include cryptocurrencies providing financial and technological value to the consumers, being able to be traded on exchanges, having a competitive market capitalization and being integral to the company’s use case. The watchdog aims to end the many cases where several cryptocurrencies have been terminated in different exchanges due to a lack of liquidity.
CoinDesk reports that the regulator says that all the cryptocurrencies will be evaluated on a case-by-case basis, and final approval will be given on whether a company can go ahead and use them in their businesses. Similar conditions will also be applied to custom tokens according to the document.
As part of the sandbox, games hosted by an operator must use a distributed ledger to “maintain the transparency and prove the fairness of these games”.
The MGA states, “
For the duration of this sandbox, the MGA will accept games that are hosted fully or partially on a blockchain environment, provided that the operator shall ensure that the gaming service is not unduly disrupted by such operational setup.
The guidelines also specify that operators must plan for the risks that may arise or be exacerbated by the use of cryptocurrencies or custom tokens as a funding method.
A Wave of Regulations
The Malta Gaming Authority follows other countries in the world that have created different laws to regulate the use of cryptocurrencies in different aspects. There seems to be a wave in Europe as numerous nations have either adopted new measures or are in the process of designing new laws to regulate the use of cryptos.
Germany and France are leading a campaign that advocates for common regulations that will guide the trading and use of crypto in Europe. It is expected that the EU financial watchdog will issue a guideline some time soon.
Do you support Malta’s move to regulate the blockchain-based games? Is the move going to affect the growth and development of blockchain technology and cryptocurrencies in the country? Share your thoughts with us in the comments section.