The regulation of digital assets is now at the center of all attention. Indeed, the Americans are not the only ones to want to establish a strict and clear framework to govern this market. The United Kingdom is also coming to replenish the ranks. Through the DCMS (Department for Digital, Culture, Media and Sport), he intends to investigate the future and reliability of the NFT market.
British regulations are limited to the fight against money laundering
So far, regulation of the digital asset market in the UK has been limited to anti-money laundering compliance. It requires any crypto company to register with the FCA (Financial Conduct Authority) before obtaining a license. Last week, the House of Commons also passed a Financial Markets and Services Bill.
Regarding the NFT, elected officials speak of a total absence of regulation. This survey will therefore help parliamentarians to better understand NFTs and to develop an appropriate bill upstream.
A survey to know the benefits and risks of NFTs
According the statement of the UK House of Commons, the investigation will be conducted by the DCMS. This committee will obviously be made up of several MPs. Its primary mission: to study the functioning of the NFT market. With this in mind, he will have to determine the advantages of non-fungible tokens as well as the possible risks they present in the short, medium and long term.
“MPs will need to consider whether NFT investors, particularly vulnerable speculators, are being put at risk by the market,” it said. A very commendable step as the price and sale of NFTs are currently experiencing a downtrend. A 90% drop from August 2021 to March 2022, according to recent data.
A regulation that will strengthen the coordination of NFTs in the United Kingdom
The results of DCMS investigation will certainly lead to proposals for regulating the NFT market. A new regulation that will fill the legal void concerning NFTs. But a law which will also have the mission of strengthening the coordination of NFTs in the United Kingdom.
Since new Prime Minister Rishi Sunak took office, many indeed believe that NFTs and other digital assets could have a place in the UK. When he was still Chancellor, the new British Prime Minister expressed his support for the establishment of a British Central Bank digital currency. He was also in favor of the creation of an NFT Royal Mint.
The British parliamentary committee’s investigation does not exclusively concern the NFT market. It also includes the broader blockchain ecosystem. Some fear the results of such a study, while others see this approach as an opportunity to better understand NFTs and digital assets. With a strict regulatory framework, they could indeed become more accessible to as many people as possible. Towards a democratization of digital assets, one would say!
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