Malta’s Financial Services Authority said Monday it wants to remove service providers for non-fungible tokens (NFTs) from the scope of its 2018 virtual-assets law as it prepares for new European Union crypto legislation.
The country’s 2018 Virtual Financial Assets (VFAs) Act requires service providers to be authorized and to publish white papers of investor information before they issue a digital token. That goes further than the EU’s Markets in Crypto Assets Regulation (MiCA), which is set to apply in Malta and across the bloc in 2024.
“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.
NFTs, a digital record of ownership of an asset like artwork or real estate, had limited use for investment or payment purposes, the Maltese regulator said. Under the final draft of MiCA, NFT service providers won’t have to register as long as their assets are assessed as being genuinely non-fungible.
Malta, one of the EU’s smallest member states, was one of the first to set its own crypto registration regime. Its existing law includes most NFTs.