Malta prepares to revise regulatory treatment of NFTs

Malta prepares to revise regulatory treatment of NFTs

Requests to review the “regulatory treatment” of non-fungible tokens (NFTs) within its Virtual Financial Assets Framework are currently being examined by the Malta Financial Services Authority (MFSA). NFTs are subject to the Virtual Financial Assets Act’s current regulatory framework, along with virtual tokens, virtual financial assets, electronic money, and any financial instruments derived from or reliant upon distributed ledger technology.

However, MFSA proposes removing Financial Asset Framework NFTs because they are unique and non-fungible and, therefore, cannot be used as payment for goods and services or investment purposes. Requests to review the “regulatory treatment” of non-fungible tokens (NFTs) within its Virtual Financial Assets Framework are currently being examined by the Malta Financial Services Authority (MFSA).

The government agency is gathering stakeholders’ feedback before formally introducing these new revisions into its framework. In November, Malta led the way in southern Europe regarding cryptocurrency regulation. In 2018, the Maltese Parliament enacted three laws creating a comprehensive regulatory framework for blockchain and digital currencies. The Virtual Financial Assets Act regulates the area of ​​initial coin offerings, digital assets, digital currencies, and related services. At the same time, the Innovative Technology Arrangements and Services Act allows the registration of technology service providers under the Malta Digital Innovation Authority’s supervision. The country’s current financial regulatory framework recognizes four different digital asset categories governed by different sets of rules: e-money, financial instruments, virtual (utility) tokens, and virtual financial assets (VFA).

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