Bitcoin and its standingMEDIA ROOM
Bitcoin is only one of the most common cryptocurrencies. Because Bitcoin was the first digital currency, the sector as a whole is often referred to as the Bitcoin industry.
Bitcoin has come a long way since its start. What was once marketed as a global currency, free from government restrictions, is now also seen as a burgeoning technology that can help improve the world’s financial system and change how information and assets are stored and shared.
This digital currency – has drawn interest as a way to move money around rapidly, without fees or bank involvement. Transfers are handled directly between users on the internet.
Back in July, the Swiss town of Zug launched a six-month scheme letting residents pay for public services using Bitcoin. While some called the trial innovative, others raised fears that the currency was not secure.
From 11 November, customers have the facility to trade Swiss francs for Bitcoins using ticket machines. To buy Bitcoins, would-be purchasers will have to give a mobile phone number for identification. Transactions will be capped at 500 Swiss Francs (€465) each. One Bitcoin currently equals around 708.64 Swiss Francs (€660), but it is possible to buy fractions of the currency. Customers are not able to buy tickets with the web-based currency, though. It is said that this is testing the customers’ demand for Bitcoin across the country through the launch of a two-year pilot project.
The ticket machine system may prove popular with people who have struggled to buy Bitcoins through their bank accounts, as many have reported high fees for international transactions and a delay before their funds arrive.
The UK Gambling Commission (UKGC) has added digital currencies like Bitcoin to its list of acceptable payment methods available to UKGC licensees. Section 5.1 of the License Conditions and Codes of Practice addresses ‘cash and cash equivalents, payment methods and services’. Licensees are told that they must ‘implement appropriate policies and procedures concerning the usage of cash and cash equivalents (e.g. bankers drafts, cheques and debit cards and digital currencies) by customers. Bitcoin gambling operators wishing to serve the UK market will still require a UK license. The UKGC hinted that the form of currency ‘is almost irrelevant’ provided licensed operators could demonstrate that ‘crime is kept out of gambling and consumers are protected’.
The current scenario in Malta is one where hundreds of casinos licensed on the island cannot accept Bitcoin due to the Malta Gaming Authority’s (MGA) regulations. Although Malta, has always been in the forefront to embrace technologic novelties, to date, the local authorities have not taken a favourable position to bitcoin. The acceptance of the Bitcoin as payment method might serve as a tool to attract Bitcoin casinos that currently use FIAT currency. According to mBit casino, the recognition of Bitcoin by Maltese gaming authorities in 2016 ‘will allow Bitcoin to get on the global gaming market and expand into Asian and Russian markets’. The Malta-based Bitcoin casino BitStarz is of the opinion that the adoption of Bitcoin would open up opportunities for spreading cryptocurrency in the gambling industry.
The MGA recently stated that it is not accepting requests from companies who would like to entertain cryptocurrency transactions. The MGA’s Chairman has recently stated that the MGA is seeking to adopt a national approach and given cryptocurrency is a financial instrument, the MGA shall be collaborating with the Central Bank, the FIAU and the MFSA.
In today’s world, were every transaction is compliance driven, cryptocurrencies are a struggle when determining the source of funds. As we are sure that everyone is aware, today, each transaction needs to be backed up with documentation with respect to source of funds. Because Bitcoin is an electronic means of payment, which may be recorded by means of ledger (this is not compulsory), it will be close to impossible to determine the source of funds in this respect.