Malta Eyes Better Regulations for Virtual Tokens and NFTs
Posted on: November 10, 2022, 12:07 p.m.
Last updated: 10 November 2022, at 12:20 p.m.
The gaming industry is going to undergo a number of changes over the next decade. One will be a greater emphasis on digital operations. The Malta Gaming Authority (MGA) is now looking to establish regulations for some of the newer innovations coming to the gambling space.
The MGA announced yesterday that it is launching a stakeholder consultation to develop proposed guidelines for the use of technology in games such as virtual financial assets (VFA), virtual tokens and non-fungible tokens (NFT). The digital solutions are slowly being integrated into the ecosystem, but a lack of regulations prevents responsible growth.
Just like cryptocurrencies, NFTs have had to face mixed reactions. Metaverse casino Slotie, which is facing regulatory backlash in the US, is a perfect example, which is also why regulations are necessary.
MGA ready for NFTs
The MGA’s consultation covers its self-defined “Guidance on the use of innovative technology schemes and the acceptance of virtual financial assets and virtual tokens through the implementation of a sandbox environment.“The authority wants interested parties to participate in the sandbox environment, which will last until 31 December.
Initially, the sandbox should have already expired. However, in March last year the MGA announced it would extend it until the end of this year. At the same time, it introduced certain updates that would fit with the changing gaming environment.
The aim of the initiative is to introduce a more structured and refined point of contact between it and industry stakeholders. It also invites dialogue on regulatory topics that shape the industry.
The MGA will host a regulatory workshop to discuss the proposed guidelines. It will soon begin sending out invitations to potential industry insiders, preparing for the workshop in December.
Next, it plans to introduce the new policy, which will present its position on the acceptance of virtual tokens and the use of ITA. It will also cover distributed ledger technology platforms and smart contracts from authorized operators.
The ongoing consultation gives these stakeholders the opportunity to provide their possible feedback on the proposed policy updates. The consultation period lasts until 14 December.
A new era in gaming
At first, NFT and gambling seem like two completely different worlds, but the two realms have a lot in common. In the future, it is likely that we will even be able to perform sports betting with NFTs, an improved option, because they are not interchangeable and are unique. Therefore, it is perfect as a means of betting.
NFTs are a relatively new type of digital collection that is predominantly popular in the cryptocurrency world. They are indestructible digital objects stored on a blockchain, meaning they cannot be changed or deleted by anyone.
This makes them an ideal solution for storing digital collections such as artwork, pieces of music or other digital content. Some famous examples of NFTs are Crypto-Kitties, a digital cat game that runs on the Ethereum blockchain, and Decentraland, a virtual world builder also based on Ethereum.
Players can place their bets in the form of NFTs and instantly see if they have won or lost. The use of NFTs in online gambling is already catching on, and the technology is becoming more common in other areas as well.
Since NFTs can verify and secure ownership of a digital object, it is natural that they can also be used in gambling. But so far, there is no platform that specifically uses NFTs for gaming.
One that comes close is Stakes, which allows players to create a permanent blockchain record of their stakes in the form of an NFT. Still, it’s only a matter of time before other options arrive.
