Blog / Articles / Spain cracks whip on crypto currency gambling

Spain cracks whip on crypto currency gambling

Spain cracks whip on crypto currency gambling

The finance and taxation ministry of Spain had recently issued a notice that Bitcoin should be treated as a convertible virtual currency, a way of exchange which then can be converted into real currencies like Dollars, Euros and Pounds. This is one of those decisions which either the Spanish government will regret or the one that might help them achieve new heights.

It all started when Coinffeine, an open source Bitcoin exchange platform from Spain asked the ministry about clarity on these issues. It asked through its law firm, Albanex, to which the ministry recently issued the statement. Also, it wanted to know whether the bets placed online in Bitcoin were legally binding or not, and also about financial laws and their effect on Bitcoins from a legal standpoint. Let’s see how the decision will affect companies using Bitcoin in Spain.

First off, this decision is going to affect the online Bitcoin gambling companies in Spain big time, since they should now apply for licenses in order to continue their operation in Spain. To continue providing their gambling services, the said companies have to obtain a general betting license as well as the corresponding license. Many companies had setup Bitcoin gambling is Spain to go through the loophole in the Gambling Act, and its popularity was ever increasing. But now that it is mandatory to have licenses, we may be seeing more and more Bitcoin gambling companies distancing themselves from Spain.

Allegedly, the Ministerio de Hacienda (ministry of finance and taxation)’s objective of this decision is to mainly to keep the Gambling companies in check with its Gambling law. Although the Ministry said so, the real purpose is not yet clear.

Also, if this is the case, that Bitcoin should be treated as electronic currency, then the cap for transaction of €2,500 holds to it too. This cap was brought about in 2012 and it prohibits paying more than €2,500 in cash to settle any transaction, and so, Bitcoins also are applicable to this now. This law was implemented so as to prevent money laundering. But, since one of the two organizations conducting the transactions should be a business, p2p (peer to peer) transactions are not affected by this cap in any way.

This is one of the first countries to provide clarity on how Bitcoin and other crypto currencies are interpreted by National governments today. This is significant development since so far, the governments’ description and interpretation was very abstract. Although the statement might contain abstract elements, the interpretation is clear, and also the limits to using the crypto currency are real as well. 

⏴ Back to Blog