On January 1st, Beijing, the capital of the Republic of China, will host the opening of China’s first government Non-Fungible Token (NFT) market. This indicates that it is still embracing technology.
State-Backed NFT Marketplace to Be Launched in China
The “China Digital Asset Trading Platform”, known to be a government-backed market, will be released in Beijing on January 1st, 2023. The controlled platform would function as a secondary market where users can exchange digital collectibles, ownership of property, and trademarks.
A report from Sina News states that the state-owned Chinese technology exchange, government-owned Art Exhibitions China, and a private organization called Huban Digital Copyrights Ltd. will work together to manage the NFT platform.
The report also states that the platform is based on the “China Cultural Protection Chain,” a permission chain as opposed to the permissionless chains of conventional NFTs. The strict regulations place restrictions on the type of digital art produced on blockchains.
Yu Jianing, a specialist in Chinese virtual currencies and metaverse space, claims that the establishment of China Digital Assets Exchange marks an advancement of the country’s cultural industry’s virtual transformation.
Before this, the Chinese central bank unveiled its plans for the CBDC and made trial versions of mobile apps for digital yuan wallets available.
However, a regulation barring all cryptocurrency transactions was enacted in China in 2021, thus outlawing digital tokens like Bitcoin. The nation has also retaliated harshly against those who engage in cryptocurrency mining. Several cryptocurrency businesses in the nation, such as Huocoin, Binance, BiKi, BHEX, and others, shut down as a result of the prohibition.
Although, while the government works to control them, the nation is starting to take an interest in the metaverse and NFTs. Zhejiang, a province in eastern China, recently declared aspirations to create metaverse-related companies worth more than 200 billion yuan by 2025.
China versus NFTs
For NFTs, the situation is more complicated. Digital collectibles are often sold for fiat money and cannot be traded. However, NFT law is still unclear, and leading internet firms like Tencent have created networks only to mothball them later.
This action also means that Bored Apes and Meebits are unlikely to appear anytime soon on a Chinese state-run official NFT marketplace. The Chinese Cultural Preservation Chain, a blockchain developed by Huaban and the Chinese Cultural Relics Exchange Institute, will serve as the foundation for the China Digital Assets Trading Platform.
What the finished project will look like is unclear. The Institute has previously expressed excitement about how museums and other cultural centers can use NFTs. The Institute is principally concerned with planning archaeological and ethnic expositions both within China and globally. These kinds of NFTs may also be targeted by the next market, but with the additional feature of enabling people to exchange what they sell.
It’s also unclear how this fits with the government’s worries about NFT and cryptocurrency speculation. However, museums all over the globe have tested NFTs as a unique funding source and a means of engaging younger people. In March, a heritage park in Xi’an made 600,000RMB ($86,000) after selling 30,000 NFTs on the auction site Taobao in just nine minutes.
Final Thoughts
Despite not being as well-liked as they are elsewhere in the world, NFTs have been a favorite among Chinese traders for the majority of the last two years. According to local regulations, NFTs in China cannot be bought with cryptocurrencies and are instead referred to as digital collectibles rather than NFTs.
In addition, closed, strictly regulated platforms rather than open ones are used for the trading of digital artwork. When a Chinese court ruled earlier this month that digital assets share the same property rights as products sold on e-commerce websites, it marked a significant advancement in the protection of digital assets.