Members of the UK parliament are opening an official inquiry into blockchain and non-fungible token (NFT) technology in an effort to explore properly regulating the space.
In a new announcement, the UK Digital, Culture, Media and Sports committee (DCMS) says they are holding an official inquiry into risks, benefits, and operations of NFTs and blockchain tech.
The committee says it’s opening the inquiry in response to the recent boom in NFT sales, which topped $17 billion in 2021.
The DCMS also says they are opening the inquiry as a response to worries that the NFT market might be a giant bubble on the verge of collapsing.
“Fears have been compounded by drops in NFT prices and sales: the NFT of Jack Dorsey’s first-ever tweet originally sold for $2.9 million; when relisted at auction, the highest bid was $280. Similarly, weekly NFT sales dropped by more than 90% from August 2021 to March 2022.”
According to the announcement, current UK NFT regulations are practically non-existent.
Says Julian Knight MP, chair of the DCMS committee,
“NFTs swept through the digital world so fast that we had no time to stop and consider. Now that the market is veering wildly, and there are fears that the bubble may burst, we need to understand the risks, benefits, and regulatory requirements of this groundbreaking technology.
Investors, especially vulnerable ones, are at risk of being swindled into buying NFTs whose value may tank on the moment of purchase. Our inquiry will investigate whether greater regulation is needed to protect these consumers and wider markets from volatile investments.
This inquiry will also help Parliament understand the opportunities presented by an exciting new technology which could democratize how assets are bought and sold.”
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