The iGaming industry has received a massive boost after the United Kingdom Treasury rejected calls for cryptoassets to be treated as a form of gambling.
Financial Services Minister Andrew Griffith said the proposed move would put the UK in conflict with European Union and global regulators.
A parliamentary Select Committee recommended earlier this year that Bitcoin and other cryptoassets should be classified as gambling due to their wildly fluctuating nature.
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They argued that categorising the industry as a financial service would result in consumers thinking it was safe, despite the volatile nature of cryptoassets.
However, Griffith vehemently disagreed with the Committee’s suggestion, saying it flew in the face of the recommendations being made in other jurisdictions.
“The Committee’s proposed approach would therefore risk creating misalignment with international standards and approaches from other major jurisdictions including the EU, and potentially create unclear and overlapping mandates between financial regulators and the Gambling Commission,” Griffiths said.
“A system of gambling regulation could also fail to appropriately mitigate many of the critical risks that were discussed in HM Treasury’s recent consultation on cryptoasset regulation – including those associated with market manipulation, inadequate prudential arrangements, and deficiencies in core financial risk management practices.
“A financial services regulatory framework is more appropriate for addressing the risks of unbacked cryptoassets and creating the conditions for safe innovation.
“This can – and will – come with a set of robust measures to mitigate consumer risks mentioned in the Committee’s report, including the risks of ‘consumers getting misinformed’.”
iGaming Sector set to Benefit From Crypto Developments
The Treasury’s response to the Select Committee’s recommendations will undoubtedly have been welcomed by industries eager to embrace crypto technologies.
This includes the iGaming sector, which has been at the forefront of the push to offer cryptocurrencies as a payment method for its customers.
On the website ‘BettingTop10’, you can discover betting apps that allow you to use cryptocurrencies to facilitate deposits and withdrawals, and many more operators are considering jumping on the bandwagon.
Bettors are increasingly favouring cryptocurrencies such as Bitcoin to fund their wagering activities due to the anonymity and enhanced levels of security they offer.
However, the unpredictable of crypto valuations and lack of regulation in the sector have left some iGaming firms wary about encouraging their usage.
Despite this, cryptocurrencies remain on the cusp of truly breaking into the mainstream and it will likely be just a matter of time before this happens.
Given its respected status in the global financial ecosystem, the UK’s decision to adopt rules for the regulation of stablecoins could be pivotal to the future of crypto.
Unlike more volatile cryptocurrencies, stablecoins are backed by underlying assets designed to keep a more constant value, thus making them a less risky proposition.
The assets include securities, fiat currencies, gold, other precious metals and property – all of which makes stablecoin much less volatile.
They allow investors an efficient way to enter the crypto market, without any of the risks associated with the more unstable currencies.
Stablecoin boasts the same features as other cryptocurrencies, allowing users to make anonymous peer-to-peer payments to other users worldwide.
Blockchain data and tracking technologies provide a transparent view of the value of stablecoin to ensure users can make informed decisions about the currency they hold.
PayPal’s recent decision to launch its own stablecoin may prove to be the decisive factor in determining the future global adoption of the currency.
Dubbed ‘PYUSD,’ the stablecoin is built on Ethereum and is designed to ‘boost the continued expansion into digital assets by the largest brands in the world’.
With PayPal boasting a 50% share in the online payments market, the firm is well-positioned to shape future thinking around stablecoin.
Jose Fernandez da Ponte, PayPal’s senior vice president and general manager of blockchain, crypto, and digital currencies, is confident the firm’s product will be successful.
“Stablecoins are the killer application for blockchains right now,” he said. “There are inherent advantages in cost, programmability, settlement time.
“The market is primed for new entrants that are fully backed – and unlike Tether – fully regulated. Stablecoins are something that we cannot just sit out.
“We are bringing to bear all the infrastructure that we have built over the years in terms of being regulated in multiple countries, in terms of risk management, in terms of compliance, and we think that that’s a key asset that is a difference in the approach that we are taking.”
“We see the appetite from users that want alternatives, that want a market that is less concentrated, and we think that we have a place in that market.”
PayPal’s network of more than 435 million active accounts gives them a massive head start in establishing stablecoin as a viable currency.
Given the firm’s well-established links with the iGaming sector, it is unlikely to be too long before operators start offering PYUSD as a payment option to their customers.
