Cryptocurrencies and NFTs are front and center in the financial section of every global newspaper. Introduced just a decade ago, the entire crypto market is unregulated and the question that is on many minds now is: should NFTs be included under digital assets and regulated?
In the last few years, a lot of new NFT platforms have been built and deployed for use. Solid platforms like OpenSea are part of the NFT space. Regulators are now taking an interest and a closer look at activity in the digital currency arena and wondering how to regulate it. In a first and close look at digital assets and NFTs, the focus is on two areas. The first is digital asset applications and French financial laws. The second is liability and copyright problems. Here, we address the first topic.
In France, digital assets cover two kinds of tokens. On one side, we have utility tokens that represent intangible assets in a digital format. These can be issued, stored, recorded, and transferred. NFTs are such assets – intangible and can be issued, recorded, and transferred in electronic mode.
The second token refers to payment tokens. These refer to a digital value representation but not issued by any central bank or government authority. These are not linked to a country’s legal tender either but are accepted as a payment method.
NFTs are acquired to get property rights and to claim the performance of services related to it. NFTs are digital value representations not issued by central banks. There are consequences to classifying NFTs as digital assets. Platforms issuing NFTs have to implement primary and secondary markets so that users get the following benefits:
1. Storage service of digital assets and access
2. Third-party benefits to hold, store, and transfer digital assets
3. Service of purchase/sale of digital assets
4. Services related to exchange of digital assets for others
5. Operating of platforms for digital assets trading
This would require compulsory registration as a digital asset service provider in France. Clients have to go through an identification process as well. This and other factors are being considered for regulation to prevent financial losses for all involved.