CBDC International Scramble For Dominance Under Scrutiny

  • Martin Baker, award-winning journalist and head of communications at Money&Co., continues his take on central bank digital currencies (CBDCs).


According to trade commentator NonFungible, trading in NFTs jumped by 300% in 2020 topping $250 million. In 2019, the same report said that the NFT market was a mere $62.8 million having dropped by 68% from the year prior,

DappRadar reports that NFTs had a great February as the top 3 NFT dapps went from $71 million to $342 million.

NBA Top Shot was said to be responsible for 67% of the transaction volume. In February, NBA Top Shot said it had over 30,000 “moment owning collectors” on the platform and $50 million in marketplace transactions.

CoinMarketCap has a section of its site that tracks NFT market capitalizations of native tokens in networks that operate in the NFT space. Recently, many of these native tokens have jumped in value.

Elon Musk has announced he is selling a song about NFTs and he wants to auction it off as an NFT. Right.

So with all this hot money moving around, some industry insiders are wondering if the Feds are getting concerned. One more critical digital asset insider called NFTs the new ICOs, worrying that the SEC will step in at some point in time to cool things down. It was not that long ago that ICOs were all the rage until the SEC slammed the door on these digital asset issuers that were largely deemed to be securities.

Of course, advocates simply point to the fact that a non-fungible token is just like any other collectible item like baseball cards or tennis shoes. It is just in a digital form. We already download and keep other digital assets that are unique, and do so without intervention from the Commission, so why not extend this concept? But securities laws can be opaque, perhaps more so in the United States.

SEC Commissioner Hester Peirce recently asked the rhetorical question, when is a digital asset a security?

“Despite the frequency with which this question is asked, clear answers are rare,” stated Commissioner Peirce. “The breadth of our statutory definition of the term “security” and the complexity of the guidance the Commission has provided contribute to this lack of clarity. People planning to distribute digital assets have to determine whether the federal securities laws apply to those distributions. The SEC staff has provided guidance to help people make these determinations, but the guidance is difficult to apply.”

In the eyes of the SEC, the standard for determining when an asset is a security comes down to the Howey Test based on a Supreme Court ruling from back in 1946.

According to FindLaw, under the Howey Test, a transaction is an investment contract if:

  1. It is an investment of money
  2. There is an expectation of profits from the investment
  3. The investment of money is in a common enterprise
  4. Any profit comes from the efforts of a promoter or third party
  • The rules are clear enough – but who, if anything or anyone, might enforce them?


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