- MGA releases Phase 2 of Cryptocurrency Sandbox Framework
- The initiative commenced on January 1, 2019 and will continue until October 10 at least
- Businesses will have to log their findings in a special LRMS portal
The Malta Gaming Authority (MGA) is making another step towards introducing cryptocurrency as an established payment solution at online and land-based properties. The MGA is currently piloting its Sandbox Framework initiative.
MGA Tests the Cryptocurrency Sandbox Framework
The Malta Gaming Authority (MGA) is one of the most forward-thinking gambling regulators embracing innovation and giving operators a chance to explore new payment and security solutions. The introduction of the Sandbox Framework is designed to serve this exact purpose.
Control over cryptocurrencies is often elusive, but the MGA believes that this payment solution can expedite financial transactions, boost transperancy, and give peace of mind to both operators and customers. This is the second phase of the extensive test program which the MGA has been testing for nearly a year now.
The phase began on January 1, 2019 and it is using Distributed Ledger Technology (DLT) (blockchain based technology) to process all transactions. If the phase is successful, the MGA will move towards the next step of the project, allowing further tests to take place.
These tests will include blockchain assets in a controlled environment and will allow the MGA to look into potential complications that could pose risk to customers or businesses.
The MGA is going to look even deeper, trying to assess any dangers beyond the gambling industry, including the economy of the country. Phase 2 will continue until October, but this timeframe is not carved in stone and the watchdog can extend the process indefinitely, until such a time that the results are satisfactory.
Operators Interested in Applying for Licenses
Businesses interested in becoming part of the test initiative can apply via the MGA portal after they have familiarized themselves with the updated Licensee Relationship Management System (LRMS). All the necessary information has been uploaded directly to the official LRMS website.
Each operator will then have extensive responsibilities to provide accurate information about financial transactions carried out in cryptocurrencies and log the data into the LRMS portal. Phase 2 is important as it’s going to start including license applications as opposed to just gauging the effectiveness of the transactions themselves.In other jurisdictions, such as Australia, crypto gambling is already very popular.
This, coupled with the rapid rise in interest from gaming operators to incorporate VFAs and DLT into their operations, were the main drivers behind the proactive approach taken by the Authority to issue a Sandbox Framework for the use of these technologies within a controlled regulatory environment. – MGA Executive Heathcliff Farrugia
In light of this, the MGA is beginning to develop the entire industry which includes both businesses and customers and testing the system in a real-world setting. The phase will also allow the MGA to issue updates in real-time and go through recommendations made by the operators themselves.
Casinos have shown a very strong interest in virtual financial assets (VFA) and DLT, which is what has made the MGA start running controlled tests to gauge whether such technologies can be rolled-out in full in the gambling sector.