The Phenomenon of NFTs Between Innovation and Regulatory Challenges

Abstract

The blockchain technology, one of the most significant innovations of this century, has been adopted in a wide range of contexts. One of the most recent developments are non-fungible tokens (NFTs). NFTs are tokens that contain unique information, not alterable and not interchangeable, able to identify, and certify, uniquely, a digital object and/or a right inherent in a physical good and of which they can, in any case, guarantee ownership and, typically, the property right. In this thesis we will take a look at their different applications, from crypto art to sports, videogames and fashion. Our main goal is to identify what NFTs are and what they can be used for, together with the associated risks and opportunities. We will then make a throughout analysis of the main issue surrounding NFTs: the lack of harmonized regulation. We will analyze what existing legislation can be applied to non-fungible tokens at the moment in the European Union, mainly looking at the different national legislation proposed by the Member States. We will move then to the analysis of a new EU regulation that is expected to enter into force by the end of 2024: the MiCA Regulation. The thesis will end by analyzing what is the position of non-fungible tokens in relation to anti-money laundering.