The future of non-fungible tokens is becoming clearer in China as the nation’s digital behemoths collaborate to develop standards for the emerging sector.
The China Cultural Sector Association, Tencent, Ant Group, Baidu, and other companies collaborated to release a “self-disciplined growth proposal” for the “digital collectable industry,” which is how NFT is now referred to in China to avoid the financial connotations of the technology.
Industry groups may not have regulatory authority, but they can help the industry adopt best practices and standards. Alibaba and Tencent are listed as members of the China Cultural Industry Association, which was established with the State Council’s approval, according to information on its website.
NFT supporters in China have been keeping an eye out for top-level regulatory directives. After China forbade cryptocurrency trading, there was suspicion that NFTs in their most basic form — freely and anonymously traded with cryptocurrencies on public, global blockchains — would not be permitted in the nation.
That seems to be the situation. China’s banking associations suggested that NFTs not be securitized or traded in cryptocurrencies in April.
The biggest platform operators in China taking a position may bring regulation of the NFT sector one step closer. According to the proposal put forth by Tencent, Ant Group, and others, digital collectable platforms should possess the necessary legal authorizations, ensure the security of the underlying blockchain technologies, enforce user real-identity checks, strengthen intellectual property protection, firmly prohibit financial speculation, and encourage users’ rational consumption.
Prior to the implementation of NFT laws, Chinese tech companies were testing the waters. Behemoths like Tencent, Ant Group, and Baidu have all developed their private, consortium-based digital collectable marketplaces. Users can only pay with the RMB, the official fiat currency of China. Secondary trading is heavily restricted to avoid price gouging.
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