China declared a ban on cryptocurrency mining and trading last year. However, even after the ban, non-fungible tokens (NFTs) have remained in a territory lacking regulatory clarity. Local state media recently reported that the number of NFT platforms in the country had increased by five times within four months.
NFTs in China were not banned like other cryptocurrencies were banned in the country last year. NFTs are not tokens on their own, but they are closely associated with the native tokens of blockchains like Ethereum and Solana, where these digital collectibles are created.
A publication by Huaxia Times said that China has more than 500 NFT platforms operating in the country. These platforms provide Chinese users with the ability to trade digital collectibles. In February this year, NFT platforms in China were only around 100.
The state media noted that the growth of these NFT platforms could be attributed to the lack of a clear crypto regulatory framework. It also added that NFT secondary markers were being used simply for speculation.
The report further said that most of the NFTs circulating within the secondary market did not have good quality. Therefore, the prices of these digital collectibles were susceptible to collapsing after the regulatory framework was solidified.
The NFTs operating in China are different because they are not heavily dependent on cryptocurrencies. Moreover, China has also shown great interest in blockchain technology, and the country’s Blockchain Service Network (BSN) is proof of this.
Chinese tech giants’ approach to NFTs
Tech companies operating in China have shown much interest in NFTs. The country’s leading app, WeChat, has banned several accounts dealing in digital collectibles. The platform said these collectibles did not have a place in the app.
Chinese authorities have prohibited people from buying NFTs for speculative purposes. Many tech giants in the country have avoided direct interaction with these digital collectibles.
Ant Group and Tencent Holdings, two of the leading tech companies in China, have listed their NFTs as “digital collectibles.” These collectibles are offered on private blockchains and are priced in the Chinese yuan rather than in cryptocurrencies.
Alibaba Cloud also launched new services targeting NFT platforms located outside China. The firm later deleted the announcement but did not indicate that it had pulled down the announcement because of pressure from authorities.
