Malta’s Financial Services Authority has announced that it intends to remove non-fungible tokens (NFTs) from its Virtual Financial Asset (VFA) regulation in anticipation of the European Union’s upcoming Markets in Crypto-assets Regulation (MiCA).
Under the current VFA regulations, NFTs must meet certain requirements and produce a product whitepaper before they can be launched.
These requirements are more stringent than those outlined in the MiCA, which is set to take effect in Malta and throughout the EU in 2025.
According to the MFSA, MiCA will specifically exclude unique and non-interchangeable crypto-assets from its scope, eliminating the need for any form of authorization for the issuance or provision of services related to NFTs.
Additionally, the MFSA pointed out that the uniqueness and lack of interchangeability of NFTs limit their use for investment or payment purposes, and their inclusion in the VFA framework may be inconsistent with the Act’s original purpose of regulating investment-type services.
Malta established its own digital asset registration system in 2018, with the goal of positioning itself as a hub for technological innovation through the creation of the Malta Digital Innovation Authority (MDIA).
MFSA Issues Consultation on Non-Fungible Tokens (NFTs)
The country’s Financial Services Authority (MFSA) is now considering removing non-fungible tokens (NFTs) from the Virtual Financial Asset (VFA) framework.
“The authority considers that it would be prudent that certain VFAs, which display clear characteristics of uniqueness and non-fungibility, also be excluded from the VFA framework,” the regulator said in a “consultation” paper.
During a period of consultation, interested parties can provide feedback to proposed rule changes. The consultation period will end on Jan. 6.