Italian Government Halts Museum NFT Sales

The government in Italy has announced that it plans to bring to an end the practice of selling digital copies of masterpieces by galleries in the country. The production of non-fungible tokens, or NFTs, has been used all over the world by museums and art galleries to generate income. Indeed, some of the pioneers in NFT assets of digital art were very well-known Italian art institutions. However, officials in the government now question this method of generating funds by selling what are essentially digital reproductions of works of artists such as Leonardo da Vinci and Michelangelo.

The move – which was somewhat unexpected in art circles – came following the sale of an NFT digital of Doni Tondo a panel painting which Michelangelo produced in 1505 and 1506. When the digital version of the image was sold last year, it made €240,000. The gallery that owns the original version of the painting, the Galleria Degli Uffizi in Florence, took only a little over a third of this sum, however.

Following the revelation that the Uffizi only profited by €70,000, the Italian government started to look more closely at the costs involved in producing high-quality digital versions of artworks. The Uffizi has a multi-year agreement with a firm based in Milan called Cinello to make digital artworks for it. After an initial investigation, some eyebrows were raised that the production costs for the digitised version of Doni Tondo amounted to some €100,000 in expenditure. According to an Uffizi spokesperson, once these ‘costs’ had been taken into account, the sum the gallery received was correct. However, some – especially those in government – question how scanning any painting, albeit in high detail, can cost so much and whether such outlay is really needed or is just a way to maximise nett profits.

The issue sparked concerns in the government about the entire concept of NFTs as art sales. One article in a leading Italian newspaper, La Repubblica, posed the question of who now owns Doni Tondo, suggesting that the legal rights to this particular work were now blurred. Other questions that went unanswered included whether the buyer of a digital artwork would need the permission of the gallery where the original is owned to display their NFT of it.

Following such questioning – and downright criticism in some quarters – Cinello went on the defensive. A spokesperson for the company said that the agreement it had entered into with the Uffizi was signed freely and based on a fair share of the proceeds of sales by splitting the revenue in half. However, the statement issued by Cinello made it clear that these were nett income streams it was referring to and, consequently, costs derived from the production of the NFT and its sale could reasonably be deducted from the split sum. “Our partner museums are always informed of the nett costs involved,” the spokesperson for Cinello said. Indeed, Cinello tried to drive home the distinction between what it produces, digitally-encrypted works – or DAWs – as opposed to conventional NFTs. The technological distinction between the two may not answer all of the questions the artwork-derived digital asset sector now faces, however.

Cinello pointed out that the Ministry of Culture in Italy had not said that it would consider blocking the firm’s existing contracts, rather that it was seeking a legal mechanism to halt the possibility for museums to strike new deals for the production of digital assets based on images in their collections. “We trust that any new legislation that may be forthcoming will be enacted soon to regulate this market,” the company said.

The Uffizi also defended what it had been doing. A spokesperson for the gallery said that it would be false to claim that the museum had sold a copy of Doni Tondo. “The museum didn’t sell anything,” the spokesperson continued. “Instead, it granted the use of the image only.” According to the gallery, the sale of the digitised version of the artwork is entirely down to Cinello.

Interested in learning more about Museums and NFTs, read more here.