The European Union is actively working to bring crypto regulatory rules into their markets in MiCA laws. According to the latest report, the EU is also planning to enact Non Fungible Tokens (NFTs). Some market experts say this could stifle innovation in the NFT space. He also notes that this could lead to unwanted surveillance of the altcoin industry.
Does this altcoin industry fall under MiCA?
cryptocoin.comNFTs have become extremely popular in the crypto space over the last year. These are Blockchain-based digital tokens that represent unique things and enable digital ownership of assets. Some of the leading ones are ApeCoin, Decentraland, Tezos, Sandbox and STEPN. This week, an EU official said that NFTs will be part of the new crypto rules.
However, in previous discussions, participants suggested that ownership of innovative tokens be excluded from MiCA. Regarding MiCA, the EU has reached a political agreement by the end of June 2022 on how to handle NFTs. The agreement resolved the main aspects of the law. However, there is no text available for this case yet.
According to the latest draft of the official statements, the law exempts NFTs unless they create another type of crypto-asset. Peter Kerstens of the European Commission said EU regulators “have a very narrow view of what NFT is”. It also implied that few entities could benefit from exemption from MiCA laws. He said the following on the subject:
If a token is issued as a collection or series, it is not considered an NFT. This is true even if the issuer calls it an NFT and each token in that series is unique.
What if MiCA laws apply to NFTs?
The application of MiCA to NFTs will change a lot more for this altcoin industry. Also, NFT publishers will likely have to publish a whitepaper explaining the details of the protocol. They also cannot make outlandish promises about the future value of NFTs. Kerstens has previously said that it would be absolutely ‘stupid’ to have a whitepaper for every NFT. Additionally, NFT marketplaces like OpenSea will also need to seek regulatory authorization, which could hinder innovation in the nascent industry.
Some of the EU national governments feel that the inclusion of NFTs under the MiCA would be an unfair oversight of the bill. Because the bill primarily aims to protect investors in ICOs and stablecoins. However, MEPs believe that NFTs are more prone to securities-style manipulation such as wash trading.
Another major sector that has become a concern is the crypto lending and staking market. Many other economies are taking a close look at how the NFT market has evolved. Interestingly, anti-crypto China is trying to standardize the market. However, he is showing interest in NFTs.
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