Back in 2020, China put its foot down on any and all things cryptocurrency. An area often characterized by deception and volatility, and sensationalized as inviting risks such as money laundering and capital outflow, the Chinese government thought best to nip it in the bud before things got even more out of hand. Despite this move, however, the existence of NFTs in the Chinese economy is not out of bounds – in fact, China is embracing them. The go-around of using cryptocurrency is China developing their own NFT industry based on state-backed blockchain infrastructure, so as to maintain full control of the technology being used.
Since late last year, one can hardly enter a mainstream conversation without hearing NFTs in the mix. NFTs, or non-fungible tokens, are essentially a unique piece of data that is tracked on a blockchain ledger. The technology in question verifies the token’s individuality, as well as provides security features for the piece’s preservation or in the event of an exchange leveraging smart contracts.
This past December, the Chinese government showed signs of warming up to the world of NFTs, with the state-owned media outlet Xinhua launching its own NFT collection. In June 2021, a collection of 16,000 NFT artworks launched by the Chinese e-commerce giant Alibaba sold out within minutes via its Alipay mobile app. Developers were conscientious to note the distinction between NFTs and cryptocurrencies.
Chinese government showed signs of warming up to the world of NFTs
As of now, there are no restrictions surrounding NFTs in China. However, the label is altered in this case, with China preferring the term “digital collectibles”. Alibaba and other tech giants such as social media company Tencent, video streaming platform Bilibili, and e-commerce site JD.com renamed their NFT offerings as “digital collectibles” to align with China’s regulations.
Although China’s relationship with NFTs is currently in a gray area, development of the NFT landscape seems encouraged, and it’s understood that research and exploration can lead to even more significant impacts of such revolutionary technology. Just last month, the Blockchain Services Network or BSN, A Chinese state-backed blockchain firm, revealed plans to implement an infrastructure that will allow businesses and individuals in China alike to make, sell, and buy NFTs. One major problem for the Chinese NFT market is that they are currently hosted by private companies with no communication amongst each other. China’s new model of BSN will operate in a more centralized manner, overlooking multiple chains in China to form the largest NFT marketplace in the nation.
Many NFT marketplaces have sprouted throughout the Western hemisphere, such as OpenSea, Rarible, SuperRare and more. China has not been left out of the equation. In the Chinese mainland, NFTCN is just one of the largest digital art marketplaces. NFTCN was launched in May under the Hangzhou-based tech giant, Bigverse, and has already garnered more than 800,000 registered users globally.
In August, Tencent Holdings Ltd. also launched an app for buying and collecting NFTs called Huanhe using cloud and blockchain technology. This was Tencent’s way of testing the waters for issuing NFTs, and could provide the basis for utilizing WeChat public accounts and mini programs for NFT development in the future. As weary as China is toward Crypto, we’re seeing a different trend in China embracing NFTs. It is clear that China’s prolific e-commerce ecosystem serves as the most solid foundation for NFT market development.
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