Singapore will not regulate speculative and risky NFTs

The developing non-fungible token (NFT) market will be left unregulated by one of the world’s largest financial hubs. The central bank of Singapore claims that the sector is still in its early stages and that rather than regulating it in its current form, it will take a tech-neutral approach.

NFTs saw a boom in 2021, with sales reaching $25 billion, up 26,000 percent from just $95 million the year before. They’ve also brought in large names like Nike and Coca-Cola, as well as celebrities like Snoop Dogg and Lionel Messi.

This growth has drawn regulators who want to keep an eye on the industry’s rapid expansion. Singapore, on the other hand, will not be one of them.

NFTs would remain unregulated, according to Tharman Shanmugaratnam, Senior Minister in Charge of the Monetary Authority of Singapore (MAS), the country’s central bank. According to local news outlet Fintech News Singapore, the MAS “does not and cannot potentially oversee all things or products that people choose to invest their money in.”

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The MAS and the government, according to Tharman, will not intervene with the industry for the time being and will take a tech-neutral position.

“The purported distinctiveness of NFTs, along with speculative demand, has served to increase prices.” If speculative fervor fades, this might put investors at risk of large losses,” the minister stated.

Tharman stated that regulating the business would be a difficult process that would need considering the legal risks and rights that NFT owners had. It’s unclear whether existing restrictions safeguard NFT owners in an industry that’s just getting started.

“Furthermore, NFTs carry significant legal complications and hazards.” “A holder of an NFT with a digital image as an underlying asset, for example, should define his claim of ownership and the legal framework that controls his rights,” the government official said.

Singapore follows in the footsteps of South Korea, which stated a few months ago that it will not regulate the NFT sector in the same way that it regulates digital assets. “It will not adopt regulations for NFTs because of the FATF position on NFT regulation. Korea’s financial authority representative said in November.