Q: What is the legal status of cryptocurrency worldwide?

A: Various countries have already enacted cryptocurrency regulations while others are still in the formulation stages. In 2021, El Salvador became the first country to embrace Bitcoin as legal tender. The initiative involved buying Bitcoin with public funds, and launching a national virtual wallet called Chivo. Poland recently introduced an AML V directive to increase transparency and establish new forms of protection from suspicious cryptocurrency transactions. Poland’s amendments apply to the providers offering exchange or intermediation in the exchange between virtual currencies and means of payment.

In 2021, the United Arab Emirates launched a comprehensive blockchain strategy according to which it would conduct 50% of government transactions through blockchain, starting from that year.

Other countries and territories are still examining ways to monitor and utilize cryptocurrencies. In March 2022, US President Biden issued an Executive Order on Ensuring Responsible Development of Digital Assets. The order instructs various authorities to explore ways to safely incorporate cryptocurrency within the US economy. However, several individual states, including Rhode Island, Wyoming and Texas, already recognize cryptocurrency and other blockchain-based virtual currencies.

In June 2022, the EU Council Presidency and the European Parliament reached a provisional agreement on the scope and direction of the Markets in Crypto-Assets Regulation. (MICA). The regulation provides preliminary guidelines on the use and sale of cryptocurrencies and NFTs in the EU.

Q: Is it legal to buy cryptocurrency in the US?

A: Cryptocurrency exchanges are legal in the US. They are subject to the regulatory scope of the Bank Secrecy Act (BSA). In other words, cryptocurrency exchange service providers are obligated to register with FinCEN, enact an AML/CFT program, keep appropriate records, and submit reports to the authorities.

The private purchase of cryptocurrencies is also legal across the US. Currently there is no federal legislation for crypto assets in the US, however the regulatory entities at the federal level have provided guidance to individual states.

Q: Why do people buy NFTs?

A: Some people purchase NFTs because they are trendy, while others buy them as a game. Some buy them as works of art and others as an investment. An individual can purchase an NFT and resell it for profit (hopefully) at a later date. Some NFT marketplaces even enable NFT sellers to gain royalties for the sold assets. NFTs are not subject to inflation like traditional (fiat) currencies, so they may be considered a stable investment if traditional finance deteriorates into hyperinflation.

Other individuals enjoy the idea of owning a work of art that is exclusively theirs. As no two NFTs are the same, the desirability to own the NFT as a collectible increases their appeal. People who aspire to build a collection of digital assets regard NFTs as a unique opportunity that never existed before.

Sometimes, NFT ownership offers special perks. There are NFT social clubs where access is granted through ownership of a membership NFT. Some restaurants offer NFT memberships to access premium service amenities. NFT funded film and TV projects enable NFT holders access to behind-the-scenes content, as well as meet and greets with the cast and crew. There is reason to believe that this trend will grow.

Q: What are the most popular NFTs today?

A: NFTs are offered in various categories, the most popular of which is collectible artwork and members clubs. NFT art comes with a certificate of authenticity and ownership issued by the digital ledger on which they are stored. While some of the artwork is wildly expensive, such as 'The First 5000 Days' by artist Beeple - which went for $69.3 million in 2021 in a Christie's auction - other works of art are easily affordable.

Music can also take an NFT form. Some artists have pre-released their albums on NFT marketplaces prior to releasing them on streaming platforms, enabling buyers to purchase a part of the album. When the album is subsequently released, buyers receive a share in the profits. Music NFTs can also be used to grant access to discounted concert tickets, special areas at concerts, or meetups with the artist.