Crypto regulation has pushed forward leaps and bounds since past collapse threatened to hold back the sector in permanent limbo, but as new frameworks have been passed, is the sector deviating from its decentralised roots?
What started out as a niche industry shrouded in scepticism, cryptocurrency and blockchain has not only “been knocking on the door, it’s opening the door” too.
Those were the words of Dee Maher, CEO of La Royale Group’s Gaming Division, who marveled at how the blockchain sector has progressed since its relative infancy in the late 2000s during a panel at SBC Summit in Lisbon.
While traditional financial figureheads and institutions may still be holding onto their beliefs that crypto is no more than a “decentralised ponzi scheme”, Jamie Dimon, CEO of JP Morgan, can no longer sit back and observe the array of use cases blockchain and crypto has brought to payments and the traditional finance sector over the last several years.
Dimon may still hold onto these views today, but international banks like JP Morgan have begun to embrace aspects of blockchain technology, such as stablecoins and tokenised deposits.
There is a groundswell of optimism about stablecoins being permeated throughout the traditional finance sector this year, ushering in a new adoption wave of blockchain-based innovations which could hold the key as new revenue drivers for companies.
Maher believes that crypto has matured to the point where firms like JP Morgan can no longer “sit on the sidelines”, as Dimon would put it, and are now actively adopting and even integrating crypto products.
“We’ve got transparency, we’ve got AML sorted out and we’re telling you this is the next big thing,” said Maher. “I think if you’re missing out and not considering crypto as a payment asset, you shouldn’t because it’s here, it’s knocking on the door and it’s pulling the door open.”
As the convergence of decentralised finance (DeFi) and traditional finance (TradiFi) begin to blur, the crypto sector has been tasked with new challenges after maturing out of several crypto winters; regulation, payments and finding the right balance.
Finding the balance
The promise of stablecoins offering instant cross-border settlement or smart contracts able to transform back office manual processing is great in theory, but how are companies, such as those in the gambling industry, expected to balance both fiat and digital currencies at once?
Scott Burrows, Head of Technical Compliance at Superbet, stressed the importance of education to those within his industry faced with this issue. He believes that launching a crypto payments offering to customers is “akin to launching in a new market”, highlighting the recent gambling market launch in Brazil.
Burrows noted that there was not a heavy emphasis on geolocation in Brazil, but this quickly changed once the regulated market launched in January 2025, as companies needed customer information to tailor to their specific preferences. The same application pertains to gambling companies complying with the varying regulatory frameworks now that require similar customer onboarding processes.
So does a crypto payment method offer the same customer information challenges? Yes and no.
Customer information is now needed for KYC and customer onboarding depending on the crypto regulatory landscape of said market, but Burrows admitted this goes against the nature of decentralisation.
Isabelle Delisle, Chief Payments Officer at Paytently, acknowledged the surge in crypto regulations, such as Markets in Crypto Assets (MiCA) in Europe and the recently passed CLARITY and GENIUS Acts in the US, but warned of the danger of overregulation and the risk of slowing DeFi’s innovation.
She said: “That convenience of the product is why people are wanting to use (crypto) but also why it is also being regulated, to make sure you’re safe, but also in regards to over regulation, that can cause the problem you were trying to address”.
Regulation vs. Over regulation
MiCA and regulatory frameworks such as those under the Virtual Assets Regulatory Authority’s (VARA) in the United Arab Emirates (UAE), have enabled market confidence from some of the most prevalent crypto companies in the world, such as Coinbase and Crypto.com.
Delisle admitted she is a supporter of regulation, believing frameworks like MiCA have brought about standardisation to an industry that was coming through turmoil following the collapses of TerraLuna and FTX in 2022.
“Being aware of the changes that are happening in the regulations, the standards that are going on, I see that as a little bit dangerous, a little bit overly regulating and a little bit pushing the grey market.”
However, she also emphasised she is a big critic of over regulation and believes that “we are heading in that convention”.
“Being aware of the changes that are happening in the regulations, the standards that are going on, I see that as a little bit dangerous, a little bit overly regulating and a little bit pushing the grey market,” said Deslisle.
“It is something that we have to be aware of, and it is something that implementation of these changes is going to have to be very careful.”
Burrows also raised a potential fragmentation issue of new and emerging regulations forming all across the globe. He stated the industry is tasked with dealing with three seperate global crypto regulatory frameworks; one in Europe (MiCA), one in the US (CLARITY and GENIUS Acts) and one in the Middle East (VARA).
Europe has been particularly selective and stringent with its crypto regulatory approach, having delisted the largest stablecoin by market capitalisation, Tether’s USDT, as it did not meet its stablecoin rules. However, if President Donald Trump’s deregulatory stance is anything to buy, it looks likely the US will take a more lenient stance for companies entering the country.
“The big call out for this year is that we need to look at regulation of crypto in a different way to how we look at regulation in other things in life, gambling being one of them,” said Burrows.
“We don’t want to end up in a situation where we can bypass (regulations), like MiCA, by transferring through the US into Asia because the frameworks are so different.”
Roadmap to the future
Looking ahead, it is clear the gambling industry has been one of the more adoptive sectors of crypto and blockchain technology. From the formation of crypto-based casinos, to leveraging blockchain to add gamification elements to product offerings.
Despite the new regulatory hurdles, the frameworks in place provide a foundation for not just gambling companies to enter markets with crypto payment offerings, but financial institutions and payment service providers alike.
Maher believes these companies should enter the crypto sector the same they would with any regulatory market, with one eye on AML, KYC compliances and ultimately, “if it is worth it?”
“For me, I would be thinking, ‘how much is it going to cost me?’, ‘what are the risks associated?’, ‘am I going to be able to register quickly?’, with AML, transaction monitoring of payments and which products work well,” said Maher.
Crypto, in large part, is still an overwhelming new frontier for companies from any industry to consider. Digital currencies are flooding the traditional market and have forced financial and gambling companies to consider the regulatory and financial risks and benefits.
While many, such as Delisle, are cautious of an overregulation of the sector, Maher believes this new phase of the crypto landscape eases concerns over market entry, and addresses those aforementioned AML and KYC questions.
There is one question that remains unanswered: how long will it take for companies to act on a surging digital currency economy before it’s too late?
