The Malta Financial Services Authority is now evaluating petitions to change how Non-Fungible Tokens (NFTs) are “regulated” under the Virtual Financial Assets Framework (MFSA).
The Virtual Financial Assets Act now incorporates NFTs along with other virtual tokens, virtual financial assets, electronic money, and other financial instruments that depend on Distributed Ledger Technology (DLT).
Since NFTs are unique and cannot be exchanged for other assets, the MFSA wants to exclude them from the framework for Virtual Financial Assets. This is because non-fungible tokens cannot be used to buy goods or as an investment.
The MFSA has said that the inclusion of these assets inside the VFA framework “may go against the spirit of the Act,” which was meant to control investment-type activities linked with VFAs that did not fit within the usual asset categories for financial services.
Before making these changes public, the regulatory body is now requesting feedback from those affected.
Cointelegraph reported in November that Malta was the first southern European nation to regulate cryptocurrencies.
In 2018, the Maltese legislature passed three laws related to blockchain technology and virtual currencies. Under the Innovative Technological Arrangements and Services Act, the Malta Digital Innovation Authority is responsible for registering suppliers of technological services. The Virtual Financial Assets Act governs initial coin offerings, digital assets, digital currencies, and ancillary services.
The nation’s current financial regulatory framework recognizes four types of digital assets: electronic money, financial instruments, virtual (utility) tokens, and virtual financial assets. Each classification is governed by a unique set of rules (VFAs).