Bitcoin To Close Down Casinos in Asia?

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While Bitcoin has long been associated with Asia, it was mostly due to the large mining pools that were once predominantly based in China. But according to a world famous economist, the cryptocurrency is not only a vessel for making money by mining in the area, but also a gambling vessel for people hoping to earn from the coin’s volatility and those who like to gamble under the radar. And, according to his opinion, the coin will eventually lead to the closure of physical casinos in Japan, China, and Korea.

Crypto to Overtake Land-Based Gambling

In a new interview with Korea Times, Dr. Andy Xie, predicted that digital assets will take over the gambling world in Asia. Xie, a former economist at Morgan Stanley who earned world-wide fame for predicting the Asian currency crisis of 97-98, said in an interview that Bitcoin was predominantly used for gambling in the area – a behavior that exposes locals to exploitation by US crypto holders.

A vocal critic of the Bitcoin boom of 2017, Xie said that the coin is mostly a “gambling instrument” for Korean, Japanese, and Chinese citizens and that he doesn’t believe that the cryptocurrency will ever replace fiat money due to its notorious volatility.  While Xie’s opinion may be mostly related to trading, past behavior has shown that crypto is also heavily used for illegal betting online.

The economist also holds US traders responsible for causing millions in losses to Asian investors. With a futures market set up in Chicago (CME), Xie says that US traders can push the price upwards when it’s high, only to push it down again until Asian investors run and they square their positions and cash out profits.

He predicts that people from East Asia are losing around $100 from gambling on a yearly basis. Thus, he sees cryptocurrencies taking over the physical world of gambling and eventually closing down land-based casinos in the area.

Gambling Prohibition Turns People to Bitcoin

As you may already know, gambling in an online casino or a land-based one is a highly restricted form of entertainment in many Asian countries. Not only do local governments prevent people to engage in gambling online by setting up firewalls but they also prohibit banks from processing any transaction that’s associated with registered gambling operators.

However, like with all countries that enforce bans on online gambling, like Russia and Australia to name a few, it’s not long before locals discover ways to bypass these restrictions. Apart from using junket Chinese locals have also been known to use crypto to gamble under the radar online.

Back in 2018, local authorities in the Guandong province uncovered a massive Bitcoin gambling ring that operated on the dark-web, one which was used to foster sportsbetting during the World Cup via cryptocurrencies. At the end of the operation, the Chinese authorities seized a colossal $1.5 billion in cryptocurrency assets alone, plus around $750,000 in bank accounts of people belonging to the ring.

Reportedly, that illegal operation was run for eight months and attracted over 330,000 users to bet in Bitcoin, Ethereum, and Litecoin, including 8,000 “affiliate agents” whose job was to draw new bettors in. The authorities then responded by closing 50,000 accounts on the WeChat app which was one of the main channels used by the illegal gambling operation.