A group of members of the UK Parliament’s Digital, Culture, Media and Sport (DCMS) Commission have decided to launch an investigation into NFTs. DCMS launch Research on NFT operations, risks and benefits.
The reason for your inquiry is the rapid development of the NFT space. This was due to the apparent growing fear among investors that the NFT market is a bubble.The group cited the case of Jack Dorsey’s first tweet on March 22, 2021 where he was sold for his 1,630 ETH worth $2.9 billion, but the value only $280.
In the UK, almost no regulatory framework exists for NFTs. Therefore, the government will look to regulate NFTs. The study also aimed to explore whether greater regulation could protect consumers and the broader market from volatile investments in NFTs.
Inquiry Announcement, DCMS said,
What are the risks and benefits of NFTs and the broader blockchain? We would like to consider whether investors in NFTs, particularly vulnerable speculators, are endangered by the market and whether there is a need for regulation. I’m here. For more information, https://t.co/C93XGBV7Ab pic.twitter.com/dvMTSwPYv1
— Commission on Digital, Culture, Media and Sports (@CommonsDCMS) November 4, 2022
Most cryptocurrency-related activities in the UK are not regulated by the country’s financial regulator, the Financial Conduct Authority (FCA). This was despite crypto exchanges being required to be registered with UK institutions.
Responding to changes in the NFT industry
The research statement also highlights changes in the NFT industry. His NFT sales worldwide reached $17 billion by the end of 2021, while his weekly NFT sales fell by more than 90% from August 2021 to March 2022.
of DappRadar Q3 Industry Report It also showed that the NFT market contracted by 67% from the previous quarter. This means that only $2.75 billion was generated by NFT trading. However, sales were up 8% from the previous quarter. The Yuga Labs project continues to dominate the NFT market, with him accounting for over 46.21% of the total NFT market cap as of September.
“At a time when markets are undergoing a major turnaround and the bubble is threatening to burst, we need to understand the risks, benefits and regulatory requirements of this breakthrough technology,” said Julian Knight, chair of the committee.
The UK is now flooded with cryptocurrencies and NFTs
Last month, the UK government fix to financial services and market bills. The bill was intended to broaden the scope of the national regulatory framework for cryptocurrencies. This included stablecoins.
In addition, the new British Prime Minister Rishi Sunak has also expressed his support for the crypto industry. Although he was Minister of Finance in his April 2022 said,
“It is my ambition to make the UK a global hub for cryptocurrency technology and the measures outlined today will help businesses to invest, innovate and scale in the country. ”
The statement was issued when the Treasury Department recognized stablecoins as a valid payment method and introduced measures to cooperate with the Royal Mint on NFTs.