NFL allows blockchain sponsorships but bans cryptocurrency
Following the lobbying push related to blockchain, the NFL now allows for blockchain sponsorships, but excludes cryptocurrency and fan tokens.
On Tuesday, the NFL granted teams limited permission to seek blockchain sponsorships, a partial turnaround from last summer, in hopes to advance with the technology that fans and players are considered to now be sufficiently familiar with.
Blockchains are digital ledgers for recording transactions that, if designed properly, can be difficult or impossible to hack or tamper with, meaning they can be used to create and record digital money - known as cryptocurrencies. They can also be used to create and record transactions relating to NFTs (Non-Fungible Tokens) that are used to record who owns something, often digital assets that only exist virtually.
However, while the league now allows “promotional relationships without undertaking excessive regulator or brand risk” after the completion of the new wave of technology, it still restricts specific cryptocurrencies and fan tokens.
In other words, cryptocurrencies or fan tokens that allow holders to access an array of fan-related membership perks like rewards, experiences, merchandise, and voting on club decisions, are not allowed. Other sports, including, for example, some soccer leagues in Europe, allow fan tokens, and some clubs have enthusiastically adopted them.
The memo reads “Clubs will continue to be prohibited from directly promoting cryptocurrency.”
NFL lobbied on blockchain
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Back in February, the NFL lobbied the Securities and Exchange Commission, as well as the White House, on problems related to blockchain technology during July-December 2021.
This memo comes after the recent federal push, and just before the NFL’s annual meetings, where league officials will meet for the first time in person since 2019, to share business initiatives including blockchain guidelines.
The NFL's head of consumer products, Joe Ruggerio, said that the deals arranged between teams and blockchain companies will not exceed three years, allowing for future flexibility.
“We’re extremely bullish on blockchain technology,” said Ruggiero. “We think that it has a lot of potential to really shape innovation, shape fan engagement over the course of the coming decade.”
League stars like Bucs’ quarterback Tom Brady and tight end Rob Gronkowski have already capitalized on the blockchain NFT business.