The island nation of Malta, through the Malta Gaming Authority (MGA) which certifies and regulates hundreds of online casinos, recently announced it protocol for integrating blockchain technology into the casinos the MGA regulates.
Malta has become a world leader in the certification and regulation of online casinos in the twenty-five years since such casinos were introduced to the internet public. Certification and regulation fees paid to the MGA by online casinos accounts for fully 12% of the Malta government’s annual revenues.
Blockchain Has Many Uses
The use of cryptocurrencies such as bitcoin and many others in numerous internet financial transactions has reached the world of casino online gaming. The blockhain regulation that the MGA will introduce will be the first such regulatory protocol for blockchain in the online casino industry in the world.
When Malta’s Prime Minister, Joseph Muscat, announced last year that the MGA would be working on blockchain regulatory protocols for the online casinos it certifies and regulates, he pointed out that blockchain technology has many other applications and that the government at large would be working on protocols for the technology.
Less than one year later, in January, Silvio Schembri, Financial services Parliamentary Secretary, announced that Mata would soon become the first jurisdiction in the world to issue far-ranging protocols for the technology that was invented to control cryptocurrencies.
The announcement has far-reaching implications not just for blockchain technology or the online casino industry; it has immense implications for the existence of cryptocurrencies and the challenge they will present to government currencies in the future. Cryptocurrencies have only recently been introduced but they are gaining acceptance as alternatives to government currencies.
As cryptocurrencies rise in acceptance and concomitant use, government currencies will fall as safe stores of value. The purchasing power of government money may fall and the government of Malta has signaled that it sees the fall of government currencies as a real possibility.
Setting up a Bureaucracy
Secretary Schembri said that the public would be able to debate three separate legislations that would serve as the regulatory protocol for blockchain technology in Malta. After the public weighs in as to its opinion on each of the three proposed new laws, they will be presented formally to the Maltese Parliament.
Taken together, the three laws would set up a system by which blockchain technology would be regulated for private, public, and governmental use. The details as they have come out make the new agencies set up by the laws seem somewhat bureaucratic but perhaps that is inevitable in a global economy, with many different government currencies, and now several hundred cryptocurrencies using the new blockchain technology.
The laws set up the Malta Digital Innovation Authority (MDIA) which appears to mean a government agency that will regulate digital, read internet, innovative, read blockchain technology. The MDIA, as it will be known, will have two functions: to regulate and oversee all entities, read businesses et al, that allow transactions to be processed using a cryptocurrency and to sell such entities on basing their financial services operations in Malta.
Since online casinos already willingly submit to regulatory instructions from the MGA, they would be prime targets for basing all their cryptocurrency financial operations in Malta.
The second law sets up the bureaucratic mechanism through which entities, to be called “service providers”, would register with the MDIA, be certified, and be judged at regular intervals as to the verisimilitude of their operation. One important aspect of the bureaucratic mechanism is that any entity that wishes to register with the MDIA would have to have its financial services operations located in Malta.
The third act names specific cohorts of businesspeople who would immediately be affected by the new blockchain legislation. These include all financial officers or services such as banks, brokerages, and ewallets. The law also anticipates the establishment of cryptocurrency exchanges which would also be affected by the laws.
Becoming a Household Word
Blockchain technology has applications in every facet of business from simple sales and purchases, to paying payrolls, buying and selling financial instruments and son on. As difficult as it is for most people to understand how blockchain technology works, everyone by now realizes that they will probably be making purchases in cryptocurrencies at some time in the near future.
Blockchain technology is said to provide a layer of safety that government currencies no longer have even though the overwhelming number of transactions are still done in government currencies. Cryptocurrency transactions are immediately processed and are transparent in the sense that anyone can see that a transaction involving a given sum in the cryptocurrency had been effected.
Blockchain technology at its simplest conception is like the old fashioned ledger books that all businesses kept before the computer age made them obsolete. In the world of cash money, a transaction may be registered on the cloud or elsewhere on the internet. The term digital is used to describe financial transactions and information that is stored online.
The most common way this digital information is stored is through barcodes. Blockchain is the newest method for making large scale transactions online. The intention is for blockchain technology to make all cash obsolete. Thus it will have use by governments as they segue away from cash. Blockchain serves to streamline financial transactions by eliminating middlemen especially banks.
Online Casino Gaming
The value to gamers and online casinos is very clear. Casinos have been allowing deposits and withdrawals to be made through ewallets for many years. The purpose of using an ewallet for the gamer was that they offered more privacy; the bank which issues credit cards would not see where the money taken from the gamer’s account and placed with an ewallet ultimately ended up.
Blockchain makes transactions even more private. Blockchain is also said to be an effective tool against the dangers of online casinos being used as money laundering resources.
A Bright Future for Blockchain
The future of blockchain may be difficult to see but that more and more transactions will be made with the new technology seems at this point to be a foregone conclusion.