With the recent changes to their licensee code of practice, the UK Gambling Commission, who oversee the gambling industry within the UK, has noted that it now considers digital currencies a cash equivalent payment system for gambling purposes. This move could be significant as it opens up a huge opportunity for the cryptocurrency industry, with UK gambling with around £4 Billion a year. Digital currencies themselves are ideal for such applications, and could begin to make inroads with a new user base when the advantages over existing fiat payment systems become clearer.
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Legitimacy as a form of currency has been a long fought battle for the digital currency industry since Bitcoin first launched. Although in general having a system that operates outside of the fiat money infrastructure is seen as a positive by most users, being able to freely move digital currency in and out of that system has become increasingly important as the idea of cryptocurrency has matured. That is why the recent announcement by the UK Gambling Commission, (UKGC), relating to digital currencies is an important step.
Gambling in the UK is fairly heavily regulated, with all providers requiring a license from UKGC and includes tight controls over payment systems both into and out of gambling accounts. However, the revised codes of practice for gambling licensees asserts that digital currencies are considered cash equivalents and are valid payments for gambling purposes.
The relevant change reads “Licensees, as part of their internal controls and financial accounting systems, must implement appropriate policies and procedures concerning the usage of cash and cash equivalents (eg bankers drafts, cheques and debit cards and digital currencies) by customers, designed to minimise the risk of crimes such as money laundering, to avoid the giving of illicit credit to customers and to provide assurance that gambling activities are being conducted in a manner which promotes the licensing objectives.”
While there are a few bitcoin gambling sites in existence now, this move could see a large new market open up for all digital currencies as the UK gambling business is worth £4 Billion a year alone. Digital currencies are very well suited to gambling sites, with fast, cost efficient and easy transfers that could provide genuine benefit to both providers and customers. In that sense this represents a chance for digital currencies to grow both awareness and user base through this new opportunity, by showing the rue benefits of the technology in direct comparison to the existing fiat payment systems.
It is clear that more and more opportunities are opening up f or the cryptocurrency industry as resistance to the idea of a digital form of currency based on blockchain technology diminishes. By providing reliable and in most cases, a better payment experience for users in each new market, digital currencies are quietly proving their worth to new potential users every day.