INATBA Publishes Policy Notes on Non-Fungible Tokens (Part 3 of 4)

INATBA is the global convener of the blockchain ecosystem, with 170+ members dedicated to promoting global adoption of blockchain and DLT technologies by bridging the gap between policymakers and industry stakeholders for mutually beneficial conversations. INATBA has 6 Working Groups, each dedicated to a specific niche within Blockchain. The Finance Working Group is set up to leverage member expertise and knowledge of DLT-based finance issues for development into policy recommendations.
INATBA and its members have, through these Working Groups, reviewed and responded to numerous regulatory proposals, including the European Commission’s Markets in Crypto-Assets regulation (MiCA). MiCA aims to provide legal certainty on the treatment of crypto-assets and crypto-asset service providers in the European Union (EU). The industry is uniquely fast-paced and rapidly evolving and, as such, demands an evolution in knowledge sharing and regulatory approaches.
INATBA’s members have produced this series of four papers to help share knowledge and encourage establishing a new form of a regulatory sandbox to develop modern, appropriate and sustainable regulatory approaches for this unique industry. The series of papers has four parts;
Together, these papers explore the fluid interchangeability of the technologies and explain how the full potential of these applications may exceed the initial scopes anticipated by policymakers. The Finance Working Group of INATBA has produced these papers by its members and for the ecosystem. The first paper, focusing on Decentralised Finance, can be found here. The second paper, focusing on Decentralised Autonomous Organsations, can be found here.

NFT stands for “Non-Fungible Tokens”. Although the concept of fungible versus non-fungible assets is not new, the digitisation (or tokenisation) of these assets has been an emergent concept through the use of blockchain that might be novel to policymakers. In short, a fungible asset is an asset of such nature that one part or quantity may be replaced by another part or quantity in paying a debt or settling an account. Non-fungible assets do not meet this definition.To contextualise, it can be stated that NFTs are characterised by the following elements:

  • Uniqueness: it is associated univocally to a user or to a virtual wallet;·
  • Indivisibility: it cannot be directly fractionated (though indirect fractionalisation is possible, e.g., F-NFTs);
  • Non-fungibility: it’s underlying asset is not interchangeable.

Although the emergence of NFTs has been through art and collectables, the application of NFTs does not end there. In this report, we will review the most popular applications, going beyond digital collectables and art and exploring how each use case differs from the others. We will also touch upon more specific applications, namely fractional NFTs, or F-NFTs. Feedback from the industry is welcomed.

To join our work on this topic, please email us at .

Report co-authors: Alireza Siadat (Annerton), Axel von Goldbeck (DWF Law), Dimitrios Psarrakis (XReg Consulting), Donna Redel (Fordham University), Guido Schmitz-Krummacher (Lisk Foundation), Ismael Arribas (KUNFUD), Jan Klesla (Blockchain Republic Institute), Jean-Christophe Mathonet (FeenPOP), Joshua Ellul (Malta Digital Innovation Authority), Lorena Stanescu (Stanescu and Partners), Merav Ozair (Rutgers Business School), Nathan Vandy (Blockchain Helix), Nina-Luisa Siedler (DWF Law), Synthia Bastron (Lisk Foundation), Tom Jansson (IOTA Foundation).