Recently, my dear friend Sue Schneider of Defy the Odds mentioned a startup she is working with in the U.S.-regulated gambling payments space. She said, “[It’s] not your father’s payment processing,” and my attention was piqued.
The startup, EDGE Boost (an EDGE Market product), is essentially a separate bank account for gamblers who wish to have instant access to their funds, 24/7, with the option to set limits to gamble responsibly. Via ZeroHash, EDGE Boost now processes crypto payments, including stablecoins.
This is where things get interesting.
Now that regulations are in place regarding the use of digital currency payments in the U.S. and Europe, startups like EDGE Boost can integrate digital assets into their payment options with confidence.
“Having clarity on the government’s support for stablecoins provides clearance for companies to start investing in integrating these technologies,” Seni Thomas, CEO & Founder of EDGE Markets, shared with me.
“The right framework brings trust, legitimacy, and a foundation both operators and payment providers can rely on,” added Jamie Zammit, SVP Commercial & Managing Director (Gibraltar), at BVNK, an enterprise-level stablecoin payments infrastructure provider.
“By reducing perceived risk, regulation paves the way for mainstream adoption,” he said.
James Bennett is the CEO of Stable Mint, a MiCA-compliant stablecoin issuer that helps companies collect deposits, store value in EUR and USD, and make payouts to customers. Bennett just returned from the SBC Summit and was surprised to find that gambling industry professionals still perceive stablecoins as illegitimate, when, in fact, they are the exact opposite.
“Over the past seven years, crypto has become a major payment instrument in the gaming sector, primarily because it is borderless, always available, and operates outside traditional banking hours. Until now, many gaming operators saw crypto as a compliance risk — transactions lacked the regulatory safeguards that standard payment systems provide,” Bennett explained.
“That is changing. With new global regulations, particularly around stablecoins under frameworks like the EU’s Markets in Crypto-Assets Regulation (MiCAR), crypto payments are becoming aligned with traditional financial standards,” he said.
“This means licensed gaming companies can now use stablecoins to facilitate faster, 24/7 payouts and settle funds across their ecosystems with the same compliance expectations as conventional payments — while keeping the speed and flexibility of crypto,” he added.
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As someone who has followed the Bitcoin (and broader blockchain space) since 2012, I recall when “anonymous transactions” were touted as one of the primary benefits of using Bitcoin. Fast forward nearly 15 years, and this perception could not be further from reality.
“Crypto is pseudonymous, not anonymous. Every transaction is permanently recorded on a public ledger. With wallet screening, blockchain analytics, and regulated on/off-ramps, KYC and AML standards can be enforced just as effectively and often more transparently than with fiat,” pointed out Zammit.
“The myth of ‘anonymous crypto’ stems from Bitcoin’s early days and media narratives, but in today’s regulated environment, digital assets are the most traceable assets in the world,” he confirmed.
Regulated companies that provide access to cryptocurrency, such as exchanges and wallets, are required to verify customer identities at both the point of entry and exit. Plugging into these exchanges is exactly how financial platforms like EDGE Boost can stay on top of their KYC and operate within regulations.
“The key to our onramp strategy is only to support highly regulated, centralized exchanges such as Coinbase, Kraken, Crypto.com, and Blockchain.com. All wallets must provide API based authentication to our users and be able to pass us their user data to match with our KYC info,” Thomas explained.
“All transactions must be Me-2-Me transfers from accounts controlled by the same user who opened the EDGE account. This is to provide a clear, auditable funds flow,” he added.
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So now that we have the rules and regulations out of the way, what is it about digital currency payments that traditional gambling payment methods just can’t provide?
“The best usage case for crypto has always been transparent, low-cost, instant settlement. Currently, the only way to access funds outside of banking hours (which is when most gaming occurs) is to use a credit card advance at 20%+ fees,” Thomas pointed out.
“Today’s users expect the same frictionless experience they get from streaming a movie or ordering food: tap, click, done,” added Zammit.
“Traditional payment systems that were built decades ago for localized economies simply weren’t designed for a digital-first, global audience. Crypto, on the other hand, delivers near-instant settlement directly from users’ own wallets, giving them full control and a seamless payment experience,” he said.
As pointed out by Zammit, moving money internationally through traditional payment rails is a clunky, lengthy, outdated process. All the steps involved create delays, and it is difficult for senders and recipients to track down information while they are waiting.
The global gambling industry deserves better than this.
“Stablecoins bypass these bottlenecks by allowing value to move directly between parties on a blockchain, delivering the immediacy that modern consumers expect,” said Bennett.
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So, where does this new obsession with stablecoins in the gambling industry come from? What can stablecoins offer us that native digital currency tokens, such as BTC and ETH, cannot?
“Stablecoins are pegged to familiar currencies like euros or dollars. A user sees their balance in euros, and this enables providers like Stable Mint to offer a payment experience just like what you would get in a banking app,” explained Bennett.
“Behind the scenes, the transaction moves like any other crypto, but the provider pays the gas fees and handles the wallet, abstracting away the blockchain complexity,” he said.
“For gaming operators, stablecoins deliver the best of both worlds: the speed and borderless efficiency of crypto rails with the predictability of fiat. That’s why stablecoins are increasingly becoming the default for cross-border payments, deposits, and payouts in gaming,” added Zammit.
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Watch | Cut Costs & Streamline Payments: The Case for Stablecoins
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Source: https://coingeek.com/stablecoins-the-future-of-payments-in-regulated-gambling/