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Apple issues new updates and invites doom for NFTs and Web3

Apple

Apple announced guidelines on Monday, October 24, regarding the inclusion of NFTs and other material on crypto trading apps. For the first time, Apple has specified explicit regulations governing the acquisition of non-fungible tokens (NFTs).

The Cupertino, California-based corporation has no problem with crypto exchanges or other apps that facilitate the trade of digital tokens and currencies trade. However, these exchanges must possess the required regional permits to function in the regions where the application is disseminated.

Apple updates app guidelines for NFT sales

The new Apple regulations specify which NFTs can and cannot be used. It also addresses when a crypto exchange application can be listed. In accordance with the revised App Store policies, users will be able to make in-app purchases for NFTs. However, Apple restricts NFTs acquired elsewhere to viewing only. The official statement reads:

Apps may use in-app purchase to sell and sell services related to non-fungible tokens (NFTs), such as minting, listing, and transferring. Apps may allow users to view their own NFTs, provided that NFT ownership does not unlock features or functionality within the app.

Apple

The tech entity prohibits any app functionality that enables NFT holders to “unlock features or functionality within the app,” which may have been an indirect workaround for its payments prohibition. This may harm some NFT projects that use the token as a membership card, granting access to additional perks and features.

The new regulations specify how NFT purchases will be taxed and what they can and cannot be used for. Moreover, crypto exchanges and developers will need to adapt to the new laws in order to continue operating on the iOS platform.

Apple charges a standard 30% fee on payments it processes, which has resulted in huge revenue from items like Fortnite that feature a great deal of unlockable in-game content for wealthy gamers.

The tech entity will also prohibit the use of “QR codes, cryptocurrencies, and cryptocurrency wallets” by apps to unlock any content or functionality.

The rules are implemented despite the fact that the corporation has been criticized for charging a hefty commission to sales of NFTs made through NFT marketplace apps such as OpenSea and Magic Eden. The move has been deemed “grotesquely pricey” relative to the typical commission rate of 2.5% on NFT purchases.

Magic Eden stated that its service had been deleted from the App Store. After learning of the regulation, several NFT marketplaces have reduced the functionality of their applications so that users can only browse and view their own NFTs.

Apple’s guidelines prohibit the use of cryptocurrencies for in-app purchases, allowing only the use of “valid payment methods” such as debit or credit cards.

Apple’s existing policy on crypto trading apps proposed by exchanges such as Binance and Coinbase, where trades are not subject to the 30% “Apple tax,” is unaffected by the new restrictions.

How do the new rules affect NFTs and Web3?

The trading volume of non-fungible tokens (NFTs) — digital art and collectibles recorded on blockchains — has decreased by 97% from its record high in January, as a series of economic shocks and crypto industry explosions dampened demand for digital assets.

As was reported last month, Apple’s harsh attitude against NFTs by imposing a 30% tax on in-app purchases is discouraging a number of marketplaces and producers of NFTs/NFT businesses from exploring the ecosystem’s full potential.

Former OnSwipe CEO Jason L. Baptiste has described the new Apple guidelines as an emerging danger to the web3 domain. Baptiste said that the new Apple regulations could pose a threat to Web3 proponents, particularly gaming creators. Baptiste later revealed that Apple’s initial official stance on non-fungible tokens and cryptocurrencies does not embrace the industry but instead views it as a possible threat.

Apple’s stance on Crypto, NFTs, and Web3 is its strongest and possibly first official stance. It does not adopt Web3 but views it as a danger. This is a step in the wrong direction from both a technological and a policy perspective.

Implementing these regulations may put the NFT market in a difficult position. This is especially true when more and more individuals enter the play-to-earn market. They intend to penetrate the mobile gaming business, which is already extremely competitive.

Apple’s limitations on NFTs and content locking may significantly affect the growth of the NFT market and the development of web3. On the one hand, individuals may commend the corporation for making material accessible to everyone. On the other hand, it prevents one of the NFTs’ essential characteristics.

However, not everyone appears negative regarding the future of NFTs on Apple systems. The co-founder and executive chairman of Animoca Brands, Yat Siu, believes that the growing popularity of blockchain-based games will result in Apple no longer taking a 30% cut.

Florence Muchai

Florence Muchai

Florence is a crypto enthusiast and writer who loves to travel. As a digital nomad, she explores the transformative power of blockchain technology. Her writing reflects the limitless possibilities for humanity to connect and grow.

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