UK lawmakers open inquiry into NFT regulation — 'there are fears that the bubble may burst'

Members of the United Kingdom’s Digital, Culture, Media and Sport Committee person opened an enquiry to perceive from the nationalist connected the imaginable benefits and risks of nonfungible tokens, oregon NFTs, and blockchain connected the country’s economy.

In a Nov. 4 announcement, the DCMS committee said its enquiry was related to the abrupt maturation of the NFT market, responding to fears the assets whitethorn beryllium overvalued and astatine hazard of the bubble bursting. According to the committee, NFT regularisation successful the U.K. is “largely non-existent,” with the DCMS readying to measure the assets up of a reappraisal by the treasury department.

What are the risks, and benefits of NFTs and the wider blockchain? We privation to see whether NFT investors, particularly susceptible speculators, are enactment astatine hazard by the marketplace and whether determination is simply a request for regulation. For much details spot https://t.co/C93XGBV7Ab pic.twitter.com/dvMTSwPYv1

— Digital, Culture, Media and Sport Committee (@CommonsDCMS) November 4, 2022

“NFTs swept done the integer satellite truthful accelerated that we had nary clip to halt and consider,” said committee seat Julian Knight. “Now that the marketplace is veering wildly, and determination are fears that the bubble whitethorn burst, we request to recognize the risks, benefits, and regulatory requirements of this groundbreaking technology.”

The lawmaker added:

“Our enquiry volition analyse whether greater regularisation is needed to support these consumers and wider markets from volatile investments. This enquiry volition besides assistance Parliament recognize the opportunities presented by an breathtaking caller exertion which could democratise however assets are bought and sold.”

Citing examples including the NFT of Jack Dorsey’s archetypal tweet, the committee encouraged users to taxable grounds earlier its deadline of Jan. 6 for an investigation of some the benefits and risks of the exertion connected the economy. DCMS noted that planetary NFT income were astir $17 cardinal astatine the extremity of 2021, but fell by much than 90% from August 2021 to March 2022.

Related: The UK cannot spend to nonstop mixed messages connected crypto

The U.K. authorities has besides moved guardant connected its Financial Services and Markets Bill, which aimed to broaden the country’s regulatory framework connected stablecoins. Prime Minister Rishi Sunak, though successful bureau little than 2 weeks, antecedently expressed enactment for the creation of a Royal Mint NFT and the U.K. establishing a cardinal slope integer currency.