NFT: Regulation at the center of attention

The regulation of digital assets is now at the center of attention. Indeed, the Americans are not alone in wanting to establish a strict and clear framework for governing this market. The United Kingdom will also join the ranks. Through the DCMS (Department of Digital, Culture, Media and Sport) he wants to investigate the future and reliability of the NFT market.

DCMS Announces Research on the Benefits and Risks of the NFT Market

British legislation is limited to combating money laundering

Until now, regulation of the digital asset market in the UK has been limited to anti-money laundering compliance. It requires every crypto company to register with the FCA (Financial Conduct Authority) before obtaining a license. Last week, the House of Commons also passed a bill on financial markets and services.

With regard to the NFT, elected officials speak of a total absence of regulation. This research will therefore help parliamentarians better understand NFTs and develop an appropriate bill upstream.

A study to know the benefits and risks of NFTs

The UK House of Commons statement said the inquiry will be conducted by the DCMS. This committee will of course consist of several members of parliament. Its primary mission: to study the functioning of the NFT market. With this in mind, he will need to determine the benefits of non-fungible tokens as well as the potential risks they pose in the short, medium and long term.

“MPs will have to consider whether NFT investors, especially vulnerable speculators, are being put at risk by the market,” it said. A very commendable move as the price and sales of NFTs are currently on a downward trend. A drop of 90% from August 2021 to March 2022, according to recent data.

A regulation that will strengthen the coordination of NFCs in the United Kingdom

The results of the DCMS study will certainly lead to proposals for regulation of the NFT market. A new regulation that will fill the legal gap related to NFCs. But a law that will also aim to strengthen the coordination of NFTs in the United Kingdom.

Indeed, since the new Prime Minister Rishi Sunak took office, many believe that NFTs and other digital assets could have a place in the UK. While still Chancellor, the new British Prime Minister expressed his support for the creation of a digital currency of the British Central Bank. He also favored the creation of an NFT Royal Mint.

The UK Parliamentary Committee’s inquiry is not limited to the NFT market. It also encompasses the broader blockchain ecosystem. Some fear the results of such research, while others see this approach as an opportunity to better understand NFTs and digital assets. Indeed, a strict regulatory framework could make them more accessible to as many people as possible. Towards a democratization of digital assets, you might say!

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My name is Ariela and I am 31 years old. I have been working in the web writing field for 7 years now. I only discovered trading and cryptocurrency a few years ago. But it is a universe that interests me very much. And the topics covered within the platform allow me to learn more. Singer in my spare time, I also cultivate a great passion for music and reading (and animals)!

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