According to the draft legislation on digital asset markets that the European Union is preparing, which it has dubbed “MiCA” and which was leaked to the media, it includes a new reference to fractionalized (exchangeable) NFTs.
The bill, considered a milestone for the cryptocurrency industry, will bring strict regulations for cryptocurrencies. While the MiCA is still open for comments, it is essentially in its final form.
So, under one provision of the bill, exchangeable digital assets that are considered and/or form an NFT could be considered as securities.
“THE ISSUANCE OF CRYPTOCURRENCY ASSETS AS NON-EXCHANGEABLE DIGITAL ASSETS, IN A LARGE SERIES OR COLLECTION, SHOULD BE CONSIDERED AS AN INDICATOR THAT THEY ARE IN EXCHANGEABLE FORM,” THE TEXT STATES AT THE BEGINNING OF ITS FINAL VERSION.
Although this section of the bill – known as the explanatory memorandum – is not legally binding, it establishes the reason for the MiCA’s provisions as it can help lawmakers interpret the scope of the legislation.
Previous versions of the MiCA made no reference to NFTs. It is clarified that truly non-exchangeable digital assets, NFTs, will not fall within the scope of this legislation.
However, a collection of exchangeable digital assets, considered as a single NFT, could potentially be considered as securities.