Initiative to Develop and Promote NFTs Launched After Rejection by Country's Financial Institutions
Due to the rejection of NFTs, which was displayed by country's banking, internet finance, and securities companies explicitly, it has been said that an initiative to develop and promote them has been launched.
Chinese tech giants have voiced their support for the "self-discipline initiative" that ensures identity checks on users, adheres to the country's ban on cryptocurrency and prevents digital assets from being speculated.
Tech Giants Are Following Authorities' Lead
The statement by the China Cultural Industry Association (CCIA), a state-supervised organization, says that domestic tech giants such as Tencent Holdings, Ant Group of Alibaba's, JD.com and Baidu have shown their support for the initiative in China that has deep involvement with digital collectibles.
China, which has a reputation for being anti-crypto, refers to Non-Fungible-Tokens (NFTs) as digital collectibles that can only be settled in the country's fiat currency, Yuan. The initiative also reiterates this stance and calls on the giants to follow a set of guidelines to assist regulatory efforts.
The 14 articles that are introduced by the initiative require that digital collectable platforms have relevant regulatory certifications, protect intellectual property, use real-name authentication and avoid establishing speculative secondary markets.
A source from the blockchain industry in China cited by South China Morning Post said that the initiative does not “represent the government's stance” and is an industry response to previous guidelines issued by government managed industry associations, aiming to prohibit "the financialization of digital collectibles" through securities, insurance, loans and precious metals by following rules described in it.
China's embrace of digital collectibles
The number of domestic platforms offering services for digital collectibles trading has increased five times since February, despite the government's warnings about the risks involved in such transactions.
Meanwhile, tech companies that are entering the sensitive field in China are keeping a low profile, as they try not to cross the red line set by authorities. As expected, they all avoid using the term "NFTs" to describe digital collectibles, as regulators tend to relate NFTs with speculation on cryptocurrencies.
Tencent and Ant Group have private and permissioned blockchains that are separate from the global NFT markets, which are mostly built on layer-one blockchains like Ethereum, Solana, Flow, etc. Platforms only allow owners to treat their assets as digital gifts in compliance with relevant regulatory scrutiny.