According to Crypto Penetration database, more than 80 countries worldwide have cryptocurrency regulations and procedures for legal entities that conduct operations with cryptocurrencies - mining, exchange, custody, tokenization of assets, etc. NFTs are particularly popular, and this word is often mentioned in the media. However, there is no other special NFT or Metaverse license, which is really used worldwide except the license of NFT marketplace/metaverse service provider in the United Arab Emirates (UAE).
Background
The abbreviation NFT stands for "non fungible token". In essence, it is a unique digital asset protected by cryptography. NFTs are usually linked to digital art and collectibles, videos, music, virtual gaming items, or other digital objects. For instance, the first music track in the form of an NFT was released on December 20 on the Base blockchain. And on the Ethereum blockchain NFTs have existed for a very long time as ERC721. The first scalable NFT project on this chain Crypto Kitties was launched in 2017. Even then caused Ethereum blockchain failures, as is happening today with NFTs on the Bitcoin, Solana, and TON blockchains.
However, not only virtual items, but also real objects (real estate, antiques, etc.), or the rights to own them, can be tied to NFTs. At the same time, operations with NFTs are still not regulated in most jurisdictions, and only one country in the world - the United Arab Emirates (UAE) - has a license for operations with them. This license is issued in Dubai at the Dubai Multi Commodities Centre (DMCC).
As part of research on crypto licenses in Dubai, I’ve found 11 legal entities with NFT licenses in the DMCC database. My purpose in this article is to briefly explain for which purpose registered companies in the DMCC freezone use this license. By the way, if you know more companies with such licenses in Dubai, please write to me.
Currently, operations with basic NFTs (virtual items) are still not regulated in most jurisdictions (European Union, UK, US, Japan). That’s why my hypothesis was that this type of license may be used for something else, like the tokenization of real-world assets (real estate, commodities, etc). However, I found only one such entity (DMCC-845145) affiliated with Midchains asset management company, and this license has recently expired.
There are also two more companies on the list engaged in tokenization and sale of luxury goods and art. Sirius NFT (DMCC-846769) has explicitly spelled out that it will tokenize luxury goods. RATBITS NFT Marketplace (DMCC-851244) provides fractionalization for art objects and auctions.
The other companies on the list operate only with virtual items. NFX Space (DMCC-863571), Paracell (DMCC-842099) and NFTwist (DMCC-866292) are NFT marketplaces. ICICB (DMCC-840988) and MGM Resorts (DMCC-858480) create their own metaverses with ingaming items. Amunra (DMCC-846344) is an NFT game however, its website is inaccessible. Mingo (DMCC-838578) is a cryptocurrency wallet from the Hedera ecosystem that uses NFT as tickets and commemoratives. Another NFT marketplace in UAE was developed by ftNFT (DMCC-854938) team, but it’s NFT license has expired, and they moved to Lithuania.
Conclusion
At the same time, the capitalization of the NFT market at the end of 2022 fell to $11 billion, according to Nansen. So far in 2023, this market has not recovered yet to the level it had in 2021. And it may have prospects. Anyway, some companies operating with NFTs and ingaming items want to obtain a special license for this purpose, and so far, such type of crypto entity exists only in the UAE for now.