Blockchain games part 7: regulations
While the world of blockchain gaming is teeming with potential, it’s not without its challenges. One of the most significant hurdles is the regulatory landscape. As blockchain and cryptocurrency regulations continue to evolve, a cloud of uncertainty looms over the industry. This ambiguity is particularly concerning for major game publishers who must weigh the potential reputational and financial risks of diving into this nascent space.
Compliance is another pressing issue. Blockchain gaming platforms often find themselves navigating a maze of stringent financial and gaming regulations. Requirements such as Anti-Money Laundering (AML) and Know Your Customer (KYC) rules add layers of complexity to the development process, driving up costs and potentially slowing innovation.
Taxation, too, presents its own set of challenges. The unique nature of blockchain-based transactions introduces a new, intricate set of taxation rules. For publishers, this means a heightened responsibility to ensure accurate tax reporting, adding another layer of complexity to their operations.
At the heart of the gaming industry is the consumer and their safety is paramount. In the world of blockchain gaming, this means implementing robust security measures to shield gamers from potential losses, be it from hacking incidents or fraud. As the industry grows, regulatory bodies might step in and impose additional compliance measures to ensure player protection.
The global nature of gaming introduces another layer of complexity: jurisdictional differences. With regulations varying widely from one country to another, global publishers are tasked with the daunting challenge of navigating this multifaceted regulatory environment, ensuring compliance across different regions.
Reputation is everything in the gaming world. As such, publishers venturing into blockchain gaming must be ever-vigilant to avoid any association with fraudulent activities within the blockchain space. Even a minor misstep could lead to significant brand damage. A step in the right direction is the Ethereum standard ERC-6551 for token-bound accounts, aiming to provide a notion of immutable identity that can be used within games.
The rise of NFTs in gaming has also brought to the fore intellectual property concerns. The creation, ownership and trade of these digital assets, especially when based on licensed properties, can raise a host of complex legal issues that publishers must navigate.
Given these challenges, what’s the way forward?
Many publishers are adopting strategic approaches to navigate this regulatory maze. Collaborating with legal experts, focusing on projects that fit within clearer regulatory frameworks and staying abreast of evolving regulations are just a few of the tactics being employed.
As the industry continues to mature and regulatory frameworks become more standardised, the path could become clearer, potentially leading to broader adoption of blockchain gaming by major publishers.