Chinese tech giants, Alibaba affiliate Ant Group, JD and Tencent, go bullish on NFTs as Beijing tightens the restrictions on the cryptocurrency market.
The tech giants have made changes to their sites and platforms by renaming NFTs to “digital collectibles.”
This step comes after the Chinese government began tightening its reins on crypto mining and trading.
Chinese Tech Giants NFTs Regulatory Pledge
China’s three major tech giants signed self-regulatory pledges to keep their growing NFT marketplaces away from crypto. So far, non-fungible tokens (NFTs) aren’t inclusive in the crypto banning by the Chinese government.
The government banned Bitcoin mining in Beijing back in June, followed by banning all crypto transactions in September. The country’s regulators have given NFT marketplaces room to operate. State entities have, however, warned against using NFTs in market speculation.
The three tech giants signed an agreement known as the “Digital Culture and Creative Industries Self-Regulation Convention.” The regulatory pledge consists of 11 points, some of which are “upholding customer rights and preventing money laundering.” These points align with Beijing’s broader digital economy goals.
According to the tech giants, digital collectibles have no monetary attributes. The resale of NFTs for a profit on the platforms will not be allowed. The AntChain platform also requires NFT owners to hold onto their tokens for around 180 days before transferring ownership to another party.
China’s Blockchain Service Network that promotes blockchain technology in both the private and government sector, is in the process of launching its NFT marketplace.
The efforts by China’s Blockchain Service Network come shortly after Huobi announced the launch of its NFT market. Huobi’s recent launch is part of its metaverse expansion strategy. Huobi Director of Strategy, Jeff Mei, shared that the NFT marketplace launch has been in the works for a while.
As part of a strategy to withdraw from the China market, Huobi shut down its China-based trading desks. This strategic withdrawal is in response to the uncertainty in the legal environment surrounding digital asset trading in China.
What are NFTs?
NFTs are digital representations of sports cars, art or any other collectibles. NFTs are tied to a blockchain and are purchased using cryptocurrencies.
Upon the purchase of NFTs, an individual(s) gains ownership rights over the unique token. However, these ownership rights are over the unique token on the blockchain and not on the artwork itself.
As much as NFTs are a hot topic in crypto, some people are still skeptical. The author of Attack of the 50-foot Blockchain author, David Gerard, compared NFTs buying to ‘trading cards.’ David went on ahead to refer to NFT traders as ‘crypto-grifters.’
Charles Allsopp, the former Christie auctioneer, feels that NFT buying makes “no sense.” As he was talking to BBC, he shared his thoughts on how “strange it is for people to buy something that isn’t there.”