The UK parliament has initiated an inquiry into NFTs to evaluate their potential advantages and market dangers, with the probability of exploring extra regulatory necessities. The Digital, Tradition, Media and Sport (DCMS) Committee members from the UK Parliament stated that the transfer comes amid the present NFT market development. In an announcement yesterday, the lawmakers added that the market development has “sparked fears” in regards to the NFT bubble bursting.
Let’s take a more in-depth have a look at the UK parliament’s NFT inquiry.
Why has the UK parliament launched an NFT inquiry?
On Friday, the DCMS committee introduced an inquiry into the operation, dangers, and advantages of NFTs in addition to blockchain expertise. The lawmakers added that NFT rules within the UK are “non-existent.” Therefore, the present NFT inquiry will probably discover the requirement for extra rules, particularly to guard “susceptible” buyers.
“NFTs swept by means of the digital world so quick that we had no time to cease and take into account,” said Chair of the DCMS Committee, Julian Knight MP. “Now that the market is veering wildly, and there are fears that the bubble might burst, we have to perceive the dangers, advantages, and regulatory necessities of this groundbreaking expertise.”
Fears of NFT bubble bursting
The DCMS committee additionally famous the fears mounting from the latest drop in NFT gross sales and pricing. For instance, they cited the steep drop within the worth of Jack Dorsey’s first tweet. Whereas the piece had initially fetched $2.9million, it solely obtained a $280 bid when relisted for public sale not too long ago.
“Our inquiry will examine whether or not higher regulation is required to guard these shoppers and wider markets from unstable investments,” Knight added. “This inquiry may also assist Parliament perceive the alternatives offered by an thrilling new expertise which may democratise how belongings are purchased and bought.”
NFTs, crypto, and the UK
To make sure, this isn’t the primary time that the UK authorities has seemed into the broader crypto and NFT market. Final month, as an illustration, the UK authorities amended its Monetary Providers and Markets Invoice, aiming to develop into a world cryptocurrency hub. Primarily, the invoice seeks to broaden the nation’s regulatory framework concerning cryptocurrencies. It additionally launched a brand new time period “Digital Settlement Belongings” rather than “crypto belongings”.
It’s price noting that the UK authorities had additionally introduced plans to release NFTs via the UK Royal Mint. The truth is, Prime Minister Rishi Sunak beforehand supported the concept of a Royal Mint NFT whereas he was the Chancellor of the Exchequer. He was additionally supportive of central financial institution digital currencies.
“We need to see the companies of tomorrow — and the roles they create — right here within the UK,” Sunak stated on the time. “By regulating successfully, we can provide them the arrogance they should suppose and make investments long run.”