While China is known for its anti-crypto stance, it has not yet banned NFTs. Meanwhile, there has been a noticeable interest in “digital collectibles” in the country lately as the government warns people against trading any forms of digital assets.
Digital collectibles are becoming increasingly popular
After the all-out crypto ban in 2021, it’s no longer a secret that China has no intention of adding cryptocurrency to its monetary system. However, the second-largest economy has yet to issue specific regulations or bans on non-fungible tokens (NFTs), which are closely tied to native tokens of layer-one blockchains like ETH and SOL.
According to a report by state-run newspaper Huaxia Times, there are over 500 platforms offering digital collectibles trading services in the country, up from about 100 such platforms as of February this year.
The press attributed the market’s reckless growth to the relative lack of regulation, explaining that many secondary markets operate as a speculative system. The report claimed that many collectibles circulating in the secondary markets are “of low quality” so markets could easily collapse once regulatory oversight is cleared.
It is worth noting that the digital collectibles circulating in China are not tied to cryptocurrencies like NFTs are. Instead, the land approaches the Sphere more on its own terms.
Despite the tough stance towards bitcoin and other tokens, the nation has shown immense interest in exploring the cryptocurrency’s underlying technology – blockchain. As CryptoPotato reported earlier this year, the country’s Blockchain Service Network (BSN) intends to develop new infrastructure that will allow users to stake non-fungible tokens.
Due to a lack of regulatory oversight, individuals and companies have tried to cautiously engage in digital collectibles as the country’s super app WeChat has suspended several accounts related to trading digital collectibles on the platform. Tencent’s own app only allowed such collectibles to be displayed as digital gifts or art, while trading them was not tolerated.
Approaches of the tech giants
After Chinese authorities warned against buying the collectibles for speculative purposes, many tech giants avoided using the word “NFTs” directly when describing such digital assets.
Alibaba-owned Ant Group and Tencent Holdings have branded their listed NFTs as “digital collectibles,” both offered on private blockchains. Interestingly, they are quoted in the country’s legal currency, yuan, and not in any cryptocurrency.
In addition, Alibaba Cloud recently launched new services for NFT platforms based outside of China. Recognizing that NFTs are still a gray area in the country, the firm tweeted the announcement on June 8, but soon deleted it from its page. However, there is no indication that such a move was due to direct pressure from the Chinese government.
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