The Hermitage Museum Aims to Raise Funds in Russia With NFTs

Saint Petersburg’s world-famous Hermitage Museum announced in July that it is considering the possibility of issuing non fungible tokens (NFTs) for works of art it has in its extensive collection. NFTs are a digital way that the proof of ownership of any digital asset can be maintained. Using blockchain technology, like cryptocurrencies, NFT art could be used to help the museum sell off one-of-a-kind digitised versions of its artworks. Although the Hermitage Museum is not planning to sell the originals it owns, digital copies could create an income stream for the gallery. However, digital copies of images can be replicated with ease. It is the associated NFT that will be issued which is expected to be what potential owners will bid for.

The Hermitage Museum is already staging talks with Binance, a cryptocurrency exchange that was founded in 2017, to work out the finer details of the project. The museum’s management team hopes to raise funds by creating digital one-off copies of its art and making NFTs to show their originality and provenance. However, Russian digital assets regulations mean that the museum will need to ensure that its proposed NFTs are exempt from these rules. In May, Museum Next reported that the Uffizi Gallery in Florence has digitally scanned Doni Tondo, a painting by Michelangelo in its collection. After the successful sale of that scan’s NFT, the gallery announced that further sales of these tokens would probably follow. Undoubtedly, other museums and galleries have seen the example set by the Uffizi and are looking for ways to follow suit.

Digital Marketplaces and Digital Assets

Towards the end of June, Binance launched an NFT marketplace that is specifically designed to attract collectors of digital artwork and other virtual assets. The platform, which is mostly known for coin trading, announced that it would also present a new ‘100 Creators’ project. The idea is to use it to showcase some of the talent around the world for original digital art creation. However, the platform may also be exactly what the Hermitage Museum is after, a ready-made digital marketplace that it can use to market and sell its NFTs.

The head of the Hermitage Museum’s legal department, Marina Tsyguleva, said that she thought that NFTs of historic artworks would probably be considered to be outside of the scope of the digital assets law in Russia. She went on to say that the Central Bank of Russia’s proposals backed up this view. However, it is likely that the museum will seek further assurance from the Russian authorities before it proceeds with any sales. The current legislation came into force in January. It regulates the ownership and sale of cryptocurrencies. However, it is framed in a way that is open to interpretation with NFTS, especially those which relate to scans of well-known masterpieces rather than original digital artworks.

Legal Issues

Some cryptocurrency commentators, and even a few Russian lawmakers, have spoken out to say that a clarification of the rules would be helpful not just for the Hermitage Museum but for other institutions in the country. Nevertheless, the law as it currently stands certainly allows for digital tokens to be issued and circulated. Known as ‘digital rights’ in Russian law, the class of token that is permitted probably includes NFTs.

However, according to Tsyguleva, the issue that needs to be pinned down is whether NFTs can be issued for the exclusive rights of digital artworks. The law seems to allow cultural institutions to sell NFTs but whether this is for exclusive rights to ownership or not is not clear. Rather than sell an NFT exclusively and face potential prosecution, therefore, the museum has decided to seek further legal advice from the authorities. Assuming that it is able to sell NFTs exclusively in the near future, the Hermitage Museum said that it would use the funds it raises to carry out some much-needed restoration work on its collection. A potential future sale could come as soon as this autumn if the gallery gets the green light.

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