One of the world’s biggest financial hubs will refrain from issuing any regulations for the burgeoning non-fungible token (NFT) market. Singapore’s central bank says that the sector is still nascent and rather than regulating it in its current form, it will take a tech-neutral stance.
NFTs have seen a boom in 2021, with the sector seeing $25 billion in sales, up 26,000% from just $95 million in sales the year prior. They have also brought in the biggest brands, from companies like Nike and Coca Cola to celebrities like Snoop Dogg and Lionel Messi.
This rise has also attracted regulators who want to police the rapidly growing industry. Singapore, however, won’t be among them.
Tharman Shanmugaratnam, the Senior Minister in charge of the Monetary Authority of Singapore (MAS), which is the country’s central bank, made it clear that NFTs will remain unregulated. The MAS “does not and cannot possibly regulate all things or products that people choose to invest their money in,” he stated, as reported by local outlet Fintech News Singapore.
Tharman pointed out that the MAS, and the government, would not interfere with the industry for now, and would take a tech-neutral stance.
“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,” the minister said.
Regulating the industry would be an extensive task that would involve weighing the legal risks and rights that NFT owners hold, Tharman added. In an industry that’s only just finding its feet, it has yet to become clear if existing regulations protect NFT owners.
“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,” the government official noted.
Singapore takes after fellow Asian country South Korea which made it clear a few months back that it won’t regulate the NFT sector in the same way it does digital assets. Korea’s financial regulator said in November that “it would not establish regulations for NFTs because of the FATF position on NFT regulation.”
Watch: CoinGeek New York panel, The New World of NFTs
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