New Jersey Seeks to Regulate NFTs with Digital Asset and Blockchain Technology Act
• New Jersey has passed the Digital Asset and Blockchain Technology Act, which will establish a “Nationwide Multistate Licensing System” for NFT issuers.
• This bill, if passed, will have little to no benefit for independent creators and collectors in the state.
• Crypto enforcement has been a recurring theme in New Jersey, with the now-defunct CeFi platform Celsius being one recent example.
The US state of New Jersey is taking a bold step forward in the world of NFTs, with the proposed Digital Asset and Blockchain Technology Act. This bill, which has already passed through the assembly and is now on its way to the Senate, seeks to establish a “Nationwide Multistate Licensing System” for NFT issuers. This is the first time an individual US state has pursued specific legislation in relation to the burgeoning NFT sector.
New Jersey is no stranger to the concept of “cracking down” on crypto, as evidenced by the case of the now-defunct CeFi platform Celsius. Last year, New Jersey was one of the first states to put the clamps on Celsius’ operations, and several other states followed suit. Less than a year later, Celsius closed its doors and became another casualty of the bear market of 2022.
Now, New Jersey is attempting to take a more proactive approach to the regulation of NFTs and other digital assets by introducing the Digital Asset and Blockchain Technology Act. If passed, this bill would require issuers of NFTs and other digital assets to register with a nationwide multistate licensing system.
At face value, this bill would appear to be little more than an unnecessary, unenforceable piece of regulation that would serve no real benefit to independent creators and collectors in the state. Without a clear benefit to those who would be affected by this legislation, it is hard to see how it could pass the Senate and become law.
Nevertheless, New Jersey is making a statement by introducing this bill and attempting to regulate the NFT sector. Whether or not it passes, it is likely that other states will follow suit and attempt to pass similar legislation in the future. Only time will tell if this bill is a sign of things to come or just another attempt at crypto regulation that will fail to gain traction.