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Congress quizzes Apple re its approach to NFTs, blockchain


On Friday, the leaders of a Congressional Subcommittee sent a letter to Apple questioning whether its guidelines might “restrict emerging technologies like blockchains, nonfungible tokens (NFTs), and other distributed ledger technologies.”

The letter was from Representatives Gus Bilirakis (Republican Chair) and Jan Schakowsky (Democrat Ranking Member), who head the Innovation, Data, and Commerce Subcommittee. While most of the letter was a set of questions for Apple about its app store approval process, it opened with examples of restrictions on NFTs experienced by Coinbase and Axie Infinity.

In December, Coinbase said that Apple blocked its IOS mobile app update and the exchange had to remove NFT transfers to get a revised app accepted. Apple wants its cut of the blockchain gas fees that have to be paid to execute NFT transfers. “Apple’s proprietary In-App Purchase system does not support crypto so we couldn’t comply even if we tried,” Coinbase wrote on Twitter.

That said, the letter notes that the Axie Infinity game eventually launched an IOS app that uses NFTs, but it took two years of negotiating with Apple, which resulted in a ‘lite’ app version.

Apple updates its terms for NFT, crypto

In October last year, the tech company updated its terms to support NFT related services, but with restrictions that continue to ensure that payments go via Apple. The text includes statements such as “provided that NFT ownership does not unlock features or functionality within the app” and “apps may not include buttons, external links, or other calls to action that direct customers to purchasing mechanisms other than in-app purchase.”

EU legislation might force Apple’s hand

Meanwhile, the European Union’s (EU) Digital Markets Act comes into force next year. This is expected to force Apple to allow developers to use third party payment solutions and apps to be installed on the IOS phones from alternative app stores – ‘sideloading’.

While Bloomberg reported that support for sideloading was in progress, to our knowledge it has not been officially confirmed, and the Congressional letter asks about the status. The current Beta version of IOS 17 shows no sign of sideloading so far.

Some believe that Apple might find away to circumvent the legislation as there are clauses providing exceptions related to safeguarding the security and integrity of hardware devices and operating systems. However, the exception clauses are less likely to apply to payments, which is the core of the NFT restrictions.

Back in the U.S., the Congressional letter concludes that “Apple’s support of innovative new technologies such as blockchains, NFTs, and other distributed ledger technologies could solidify American leadership of these technologies.”

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