MAS Will Not Be Regulating Activities Related to NFTs for Now
by Fintech News Singapore February 16, 2022The Monetary Authority of Singapore (MAS) said that it has no plans to regulate activities in relation to non-fungible tokens (NFTs) according to a parliamentary reply.
According to Tharman Shanmugaratnam, Senior Minister and Minister in charge of MAS, the regulator “does not and cannot possibly regulate all things or products that people choose to invest their money in”.
NFTs are a form of digital token where each token has distinct and unique features that are verified and secured by blockchain technology.
While NFTs can be used to represent any underlying asset, they have for now been mainly used to tokenise digital art and other collectibles.
Given this nature of NFTs’ underlying assets, MAS currently does not regulate this space and has instead taken a more tech-neutral stance.
Tharman Shanmugaratnam
Tharman Shanmugaratnam said,
“For NFTs in particular, their perceived uniqueness, combined with speculative demand, has served to inflate prices. This potentially puts investors at risk of outsized losses should speculative fervour abate.
Further, there are significant legal complexities and risks involved in NFTs. For example, a holder of an NFT with an underlying asset of a digital image should clarify his right of ownership and the legal framework that governs his rights.”
However, the regulator will keep an eye on the space and said that if NFTs have the characteristics of a capital markets product under the Securities and Futures Act (SFA), it will then be subject to its regulatory requirements.
MAS added that investments in digital tokens including NFTs are not suitable for retail investors and has urged consumers to be cautious.
For now, MAS will continue to monitor the digital token space.
