Stablecoins are the tonic to cryptocurrency’s volatile nature. Pegged to the value of currencies like the US Dollar, they don’t suffer quite the same highs and lows in prices.
Price stability has seen them become popular options in industries like iGaming, where players are looking for reliable payment methods rather than alternative investments. This stability, as well as the speed, low-cost, and security of transactions, has also seen them become a popular consideration for a lot of global governments.
Cryptocurrency in iGaming
Cryptocurrency has taken the iGaming industry by storm thanks to its rapid, low-cost transactions, security, and privacy. More and more online casinos accept cryptocurrency. And, thanks to their greater price stability, sites like LuckyBlock supports BTC as well as stablecoins like USD Tether.
Tether is tied to the value of the US Dollar and one Tether will always be worth one dollar. This is a far cry from the volatility of Bitcoin, Ether, and other cryptocurrencies, which can experience dramatic price swings of 10% or more in a day. For investors, that kind of volatility can be beneficial. For consumers looking to hold and use cryptocurrency for transactions, it can prove costly.
Benefits Of Stablecoins In iGaming
Despite lacking the volatility of other coins, stablecoins offer many of the same benefits. Some, albeit not all, are decentralized. They’re stored in crypto wallets and transactions, which are private and pseudonymous, can be completed in a matter of seconds. They take much of the risk out of cryptocurrency, while still offering the features that have attracted millions of users to the disruptive technology.
Stablecoins have become popular in gaming, finance, and especially in iGaming. The coins offer several benefits to users, and casinos, including:
Lack Of Volatility – The point of stablecoins is they are not susceptible to the same volatility that is experienced by Bitcoin and other cryptocurrencies. If Bitcoin’s value drops while a player holds that money in their casino account, they naturally lose money. Online casinos, too, can benefit from this same lack of exposure to crypto’s volatile prices.
Fast Transfers – Stablecoins operate on the blockchain, enabling transfers to be completed in a matter of minutes or, in some cases, instantly. Traditional payments can take several days before they are processed and completed. For deposits, a payment delay means the player has to wait before they can play. For withdrawals, it can mean a wait of several days before the player can access their winnings.
Avoid KYC Checks – Some licensing jurisdictions require licensees to request and verify personal details using checks called Know Your Customer (KYC) checks. Stablecoins, like other cryptocurrencies, do not necessarily demand the same submission of personal and financial details, and many crypto casinos do not have the same KYC requirements making them more accessible to all.
Reliable Budgeting – Quicker deposits and withdrawals, as well as price stability, means more reliable budgeting for players who don’t have to try and predict Bitcoin price movements or keep track of multiple deposits and withdrawals before they hit accounts. Players can, instead, enjoy sitting back and enjoying their chosen casino games.
Better Bonuses And Offers – Casinos themselves also benefit from faster payments, easier account confirmation, and lower costs. These savings are passed on to consumers in the form of bigger prizes, considerable jackpots, and generous sign-up bonuses.
The Treasury
These benefits have also attracted the attention of governments and central banks, including Australia’s Treasury. In March, The Treasury published plans on how it intended to deal with cryptocurrency. The guidelines primarily concentrate on protecting consumers, especially in the area of custody storage solutions.
Regulatory Requirements
Exchanges will be expected to provide disclosures for certain crypto assets, for example. But, stablecoins were largely excluded from the guidelines. Like a lot of countries, Australia’s Treasury treats stablecoins like e-money. They will follow the same rules as those that govern Stored Value Facilities (SVFs) in the country.
The Treasury believes cryptocurrencies are predominantly covered by existing securities guidelines, even though those guidelines predate the crypto industry by decades.
CBDCs
The country is exploring Central Bank Digital Currencies (CBDCs). These are digital versions of existing fiat currencies, minted and managed on the blockchain network. They aren’t cryptocurrencies because they will be managed by central banks. But they could bring the benefits of crypto to traditional money.
They may mean a relaxation of the concept of banking hours, for example. For years, consumers have been unable to perform certain financial transactions outside the 9-5 of their banks’ operating hours.
Positive Sentiment
Many commentators expected the Australian government to put forward a tight regulatory framework that would have effectively killed off innovation in the industry. As such, the pared-down regulatory announcement was considered positive news by many.
