U.K. lawmakers are interested in hearing what the public has to say about regulating non-fungible tokens (NFTs), which they fear are often overvalued.
A committee of members from different political parties, the Digital, Culture, Media and Sport Committee (DCMS), launched an inquiry on Thursday into the operation, risks, and benefits of NFTs, digital assets that represent ownership of virtual or physical assets.
Celeb endorsements have generated interest in NFTs, while the popularity of the Metaverse, a virtual world in which these tokens can be bought and sold, has further enhanced their value.
A statement stated that global NFT sales had exceeded $17 billion by the end of March 2021. However, weekly NFT sales have declined by more than 90% from August 2021 to March 2022.
In the United Kingdom, lawmakers are concerned that NFT speculation may be a "bubble." An example provided by the committee is the NFT of Jack Dorsey's first tweet, which initially sold for $2.9 million, but when it was re-listed at auction, the highest bid was $280.
“Now that the market is veering wildly, and there are fears that the bubble may burst, we need to understand the risks, benefits, and regulatory requirements of this groundbreaking technology," Julian Knight, MP, said.
The U.K. is advancing with its plans to regulate the crypto industry. The amendments recognized crypto as a regulated activity and ensured that ads of firms not fully licensed to operate in the country could be blocked.
Inquiries must be submitted by January 6.
When a crypto analyst contacted the Digital, Culture, Media, and Sport Committee, no comments were available.