Many countries have revealed their regulatory attitudes towards NFTs. Can the NFT market still develop “freely”?

1. Overview of the NFT market

It has been 10 years since the birth of NFT, but the real popularity of the world is still in 2021. The NFT painting “Everydays: the First 5000 Days” created by encryption artist Beeple fetched a high price of 69.3 million US dollars at Christie’s auction.

NFT projects have also sprung up like mushrooms after a spring rain, and the NFT trading market supporting them is gradually improving, such as OpenSea, Super Rare, Foundation, etc., and an NFT trading market dominated by the secondary market has been formed.

According to recent data from DappRader, the transaction volume of OpenSea, the world’s largest NFT market, has exceeded 30 billion US dollars. According to historical data, the total market value of global NFT market assets in 2020 is only 317 million US dollars, and it will rapidly rise to 12.725 billion US dollars in the first half of 2021. In the first quarter of 2022, the total global NFT transaction assets have reached 16.457 billion US dollars. From these data, it is enough to see the rapid growth of the NFT market size and its huge potential.

As the NFT market gradually matures and plays a huge role in various fields such as games, fashion, and art, its importance is emerging, and the attitudes of different countries towards NFT are gradually becoming clear.

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2. Inventory the NFT market in various countries and analyze their regulatory attitudes

foreign

The foreign NFT market is maturing. With the continued popularity of the Metaverse and NFT, many countries have demonstrated their regulatory attitude towards NFT, and the NFT market will no longer continue to grow wildly as before.

U.S.

Almost 41% of the world’s NFT companies are headquartered in the United States.

As early as the beginning of 2022, the U.S. Department of the Treasury released the “Research on Money Laundering and Terrorist Financing through Art Transactions”, which mentioned that NFT technology has brought new opportunities to the global art market, but pay attention to the risks of money laundering. , to prevent criminals from using illicit funds to trade. At the same time, be careful of the fraudulent behavior you will encounter when trading NFTs.

On April 18, the IRS plans to tax NFT investors. NFT investors and creators have ballooned the market to $44 billion, according to Chainalysis, and IRS officials say NFT investors owe billions in U.S. taxes and they are preparing to crack down on them. Although taxing NFT transactions has harmed the interests of many NFT investors, this behavior means that NFTs are moving towards compliance.

Singapore

The second largest NFT startup location is from Singapore, which is home to more than 10% of the world’s companies. On March 11, 2021, the purchaser of the NFT painting “Everydays: the First 5000 Days” created by crypto artist Beeple included an investor from Singapore.

In February 2022, the Monetary Authority of Singapore (MAS) stated that if NFTs were to be regulated, compliance requirements would need to be followed. On May 13, the Supreme Court of Singapore issued the first-ever injunction against the sale of NFTs, recognizing that NFTs are valuable property that needs to be recognized and protected. On May 27, Singapore’s Central Provident Fund Board (CPFB) recommended NFTs as part of a diversified portfolio.

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BAYC in trouble #2162

The Singapore court’s identification of NFTs as “private property” provides the possibility of NFT protection, and also takes a meaningful step forward in the way of NFT characterization, at least theoretically endows NFTs with the possibility of applying “property” protection.

Other countries

India ranks third in the number of NFT companies with 11 companies, accounting for 5.02% of the global total.

In early 2022, one of the technology and business-focused federal budget revenue plans submitted by New Delhi, India mentioned the need to levy a 30% tax on the transfer income of virtual digital assets such as NFTs, which will greatly promote the development of the digital economy.

On May 16, the Australian Taxation Office (ATO) issued a notice that just like selling shares, sales of NFTs may also be subject to tax.

The South Korean NFT market is also relatively active. On February 15, the South Korean Financial Supervisory Service (FSS) announced in its annual work plan that it will strengthen the monitoring of new trading assets including NFTs.

domestic

Virtual currency trading has been firmly prohibited in China, and NFTs that are traded in virtual currency abroad are also strictly regulated in China. In order to become tokenless and curb the financialization of NFTs, NFTs have another name – digital collections.

On April 13, China Internet Finance Association, China Banking Association, and China Securities Association issued an initiative to prevent NFT-related financial risks, resolutely curb the tendency of NFT financial securitization, strictly prevent the risks of illegal financial activities, and consciously abide by the code of conduct . Ensure that the value of NFT products is fully supported, guide consumers to consume rationally, and prevent inflated prices from deviating from the basic law of value. Protect the intellectual property rights of underlying commodities and support genuine digital cultural and creative works. True, accurate and complete disclosure of NFT product information to protect consumers’ right to know, right to choose, and right to fair trade.

On May 19, Banyuetan published an article “Don’t let “NFT” become the new favorite of hype”. Regarding how to guide the healthy development of NFT in China, he pointed out that “taking the essence and eliminating the dross” is the right way. New technologies have an important impact on future economic development. All parties should not only pay attention to immediate interests, but also have a long-term vision, so that the digital collection market can develop in a healthy and orderly manner.

China also attaches great importance to copyright protection and the development of the digital art market.Digital collections refer to the use of blockchain technology to generate unique digital certificates corresponding to specific works and artworks, and on the basis of protecting their digital copyrights, to achieve authentic and credible digital distribution, purchase, collection and use.

On April 20, the Hangzhou Internet Court heard a digital collection infringement case. The NFT trading platform should pay attention to whether the digital collection uploaded by the user is original. Although the digital collection is uploaded by the user of the platform, the platform party also needs to pay half of it. responsibility.

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Image source: Lianxin

Another regulatory focus is on the secondary market. The continuous emergence of the secondary market and the platform’s laissez-faire on trading behaviors have pushed the digital collection transaction towards financialization, which has also brought many hidden dangers. In this regard, since March 2022, Tencent has closed a large number of digital collection trading platform mini-programs. And the official account, there are also relevant documents that need to be processed for the qualification requirements of the secondary market of Chinese NFT platforms.

3. Summary

Countries are actively studying how to supervise NFTs, but no conclusion has been reached. However, judging from the regulatory attitudes that countries have shown, NFTs are moving towards compliance and legality, and the NFT market will become more orderly.

The compliant development of digital collections in China is already on the way. The huge potential behind NFTs cannot be ignored. How to make this market develop sustainably and healthily with a steady stream of energy is exactly what countries, companies and investors need to think about.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/many-countries-have-revealed-their-regulatory-attitudes-towards-nfts-can-the-nft-market-still-develop-freely/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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