The UK’s Digital, Culture, Media and Sport Committee (DCMS) will consider the risk posed by the NFT market and whether further regulation is needed.
The government launched an inquiry in the current week and revealed on its website that it will also consider the benefits which blockchain could bring to the country’s economy. The document calls for parliamentary scrutiny and submissions “from anyone” are being welcomed until January 6, 2023.
“The art market should engage with the call to evidence to create its collective voice heard”, stares Racheal Muldoon, a barrister at The 36 Group, who confirmed that she will file a response. She added that “artists should address their concerns about the tokenization of their work—increasingly by nefarious actors without their consent—and the subsequent sale of the resulting NFTs, in addition to their promotion, specially across social media, that currently falls outside the regulator’s concern.” Similarly, art market participants need to “submit answers about the UK’s approach to the sale, buy, and management of NFTs”, she states.
The research asks whether present regulations are enough, what harms may exist (especially for vulnerable people), whether blockchains provide security to UK investors and what potential benefits NFT speculation offers to society and individuals.
The review is somewhat different in tone from the government’s generally supportive approach to cryptocurrencies, that in 2021, announced its plans to turn the country into a “global crypto-asset hub”. for digital assets.” Besides, it comes at an appealing point for the market in NFTs, that is grabbing headlines due to its volatile nature and sharp fall from its $17 billion peak in 2021.
However, with Christie’s revealing its launch of a wholly on-chain ETH marketplace only one month ago and the previous week’s NFT. London conference announced to have interested over 2,500 visitors, it seems that investing thought into the future of crypto and its regulation in the art world, is worth the time.