Cryptocurrency gambling is on the rise, perhaps because it is cheaper, faster and transparent, unlike traditional gambling methods. Crypto gambling allows people to bet using major cryptocurrencies, including, Bitcoin (BTC), and Ethereum (ETH). It is considered to be a much safer way to gamble because it is backed by distributed ledger technology, where all gambling data is stored on blockchain and hence once validated, cannot be changed or falsified in any way.
Most online casinos offer various gambling options while others are specifically ‘crypto-only sites. The legality of crypto gambling varies according to country and the same applies to regulatory cautions. In Japan, for instance, online gambling casinos have been legalized despite the fact that the country has very strict regulations which have proven to be a major obstacle in crypto gambling.
We all know Japan as a leading country in FinTech developments; however, online crypto gambling has greatly struggled to take off in light of the country’s strict regulation. About two months ago, TRON, a blockchain-based decentralized application (DApp) platform announced that it would block gambling in Japan so as to comply with the country’s local regulation. As a result, the issue of regulating crypto gambling hit the public’s attention. Crypto gambling is, however, one area in the crypto and blockchain ecosystem that Japan is 50/50 on going bullish over.
Asides from a few regulated sectors that have been approved by the government, gambling is generally illegal in Japan according to the country’s criminal code. However, in July last year, Japanese lawmakers passed a controversial bill legalizing gambling resorts.
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Some of the hurdles that are slowing down the adoption of crypto gambling and blockchain in Japan include the fact that;
Japan loves its cash –According to research, about 65% of transactions in Japan are still carried out through cash. However, it is worth noting that cryptocurrencies enjoy legal status in the country which may, in the near future tip the balance in its favor.
Meanwhile, a high rate of taxation is imposed on cryptocurrencies in the country –Apparently, income gained from crypto trading currently stands at a tax rate of 55%, but there are attempts underway to lobby the government to lower this to 20%. Profits from crypto trading are currently classified as “miscellaneous income” in Japan, meaning that traders pay between 15% and 55% capital gains tax on top of their annual tax return. The highest bracket of tax generally applies to high earners, or those earning more than 40 million yen ($365,000) per year.
In a nutshell, the ambiguous nature of legality surrounding gambling combined with increasing acceptance of cryptocurrencies in the region presents a strong case for the rise of crypto gambling in Japan.