Blockchain technology, once thought to be the way of our future, has somehow evolved into a meme-generating machine. And of course, the British Parliament that once decided for the fate of all colonies, is now looking into NFTs. After all, where the money flows, lawmakers will fly in their helicopters throwing regulation bombs on the industry. So this time around, the British Parliament is opening an inquiry into blockchain technology and NFTs. Perhaps, making bold predictions is not a professional journalistic move here. But, would it be crazy to say that more tax on NFTs are on their way?
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Blockchain Technology and NFTs
In an effort to properly investigate the sector, members of the UK Parliament are opening an inquiry into blockchain. Furthermore, they are exploring non-fungible tokens (NFTs) to be able to properly regulate the space.
For the most part, they will be examining the risks, benefits and operations of NFTs and blockchain. The UK Digital, Culture, Media and Sports (DCMS) will be responsible for the task.
Primarily, this a response to the NFT boom that took place on 2021. In total, NFT sales topped at around $17 billion last year which says a lot about the potential of JPGs. Now clearly, there are concerns of there being a bubble in the Jpeg market and a subsequent collapse on its way.
“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.”
$17 Billion Dollar Concern
According to Julian Knight MP, Chair of the DCMS committee, UK regulations in this sector are basically non-existent. Much like other countries, UK was late to the regulation party.
“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.”
Libertarianism aside, some degree of honest regulation may not be a bad idea after all. During last year’s NFT boom, the insane volatility as well as a million scams put a big dent in people’s pockets. Regardless, we should wait and see how the upcoming regulations on blockchain technology and NFTs will turn out. However, stricter KYC requirements and more tax will most definitely be on its way.
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