Outlier has submitted a response to the UK Parliament’s call for evidence on NFT’s, Blockchain, and regulation.
The DCMS Committee will hold an inquiry into the operation, risks, and benefits of Non-Fungible Tokens (NFTs) and the wider blockchain. MPs are expected to consider whether NFT investors, especially vulnerable speculators, are put at risk by the market. The inquiry may also look into the wider benefits that NFTs and the blockchain could provide the UK economy. NFT regulation in the UK is largely non-existent. The inquiry into NFTs and the Blockchain is likely to examine whether more regulation is needed, ahead of a Treasury review.
Read a Summary of our responses below
Question 1: Is the UK’s light-touch NFT regulation sufficient?
The UK’s market-making regulatory design logic is appropriate for accommodating NFTs within the existing framework, while addressing their unique characteristics and not stifling their use cases. Guidance is needed for their tax treatment and their IP implications.
Question 2: What are the potential harms to vulnerable people of NFT speculation?
NFTs present risk for individuals unfamiliar with the technology, particularly regarding unethical practices such as scams and fraud. Regulators must clarify the legal status of NFT’s and support the integrity of the market, including implementing sensible anti-fraud measures and consumer education.
Question 3: Do blockchains offer security to British investors?
Yes. NFTs and blockchain technology offer security to British consumers and investors through cryptography, decentralization, and transparency, which give consumers additional protection and integrity for transactions, trade, and ownership.
Question 4: What are the potential benefits to individuals and society of NFT speculation?
NFTs offer various benefits to individuals and society such as proof of ownership, authenticity, and transparency. They enable individuals to establish clear ownership of digital assets, safeguarding them from exploitation by third parties
As the largest Web3 accelerator, Outlier has a mission to open-source our knowledge to support the public good.
We are honored to help the UK government on their path to building a hub for Web3 and the Open Metaverse.
