Earlier, the European Banking Authority was worried about the centralized institutions under the European Union (EU) would be unable to formulate and maintain a regulatory framework for cryptocurrencies and all other digital assets. Pressurized by the lack of talent and logistic issues, policymakers thought it would be unfeasible for them to impose regulations by 2025. But finally, the EU seems to have reached a conclusion. Starting with NFTs, which are to be regulated under MiCA, the EU is moving towards regulating all decentralized digital assets.
Policymakers from the European Union have highlighted a landmark regulation package to protect consumers and increase transparency amid the rising number of crypto scams and thefts in the decentralized crypto market. The European Parliament and Council recently reached a preliminary political agreement on the Regulation on Markets in Crypto Assets (MiCA). The deal demonstrated the way investors have to treat NFTs in a tradable way to improve ownership of the assets such as artworks.
The deal basically focused on the major political elements of cryptocurrencies, but experts have reported that its final draft exempted NFTs unless they have some kind of crypto asset interlinked to them. However, the matter is still being debated. The EU national governments consider that including MiCA would be an unnecessary extension of the original bill that primarily aimed to protect the interests of the investors in stablecoins and initial coin offerings.
Since the argument is still under consideration, it raises the question as to when will these regulations be imposed. Experts have asserted that most of the provisions under the deal will be imposed 18 months later, around mid-2024, except for the urgent requirements related to stablecoin regulations. So, to further advance these provisions, NFT collectors would have to publish a white paper stating all the details of the protocols levied upon NFTs.
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