Author : Zack

Date : Dec 06,2022

Nonfungible tokens are intended to be eliminated from Malta's framework for virtual financial assets.

In its framework for virtual financial assets, the Malta Financial Services Authority (MFSA) is now considering petitions to change the "regulatory status" of nonfungible tokens.

NFTs fall under the purview of the Virtual Financial Assets Act, which also covers electronic money, virtual tokens, virtual financial assets, and all other financial instruments based on or reliant on distributed ledger technology.

However, because NFTs are distinct and nonfungible and can't be used as payments for goods and services or for investment purposes, the MFSA is recommending that they be taken out of the framework for virtual financial assets.

The inclusion of such assets under the VFA framework, according to the MFSA, "may run opposed to the spirit of the Act, which seeks to regulate investment-type services offered in relation to VFAs lying outside the scope of current traditional financial service asset categories."

Before formally integrating these new adjustments into its structure, the governing body is currently seeking input from stakeholders.

In November, Cointelegraph claimed that Malta was setting the standard for cryptocurrency regulation in Southern Europe.

Three laws establishing a thorough regulatory framework for blockchain technology and virtual currencies were passed by the Maltese parliament in 2018. The Innovative Technological Arrangements and Services Act gives the Malta Digital Innovation Authority the authority to supervise the registration of technology service providers, while the Virtual Financial Assets Act regulates the area of initial coin offerings, digital assets, digital currencies, and related services.

Four main categories of digital assets, each subject to a different set of regulations, are recognized by the nation's present financial regulatory framework: electronic money, financial instruments, virtual (utility) tokens, and virtual financial assets.