China Launches State-Owned NFT Marketplace
Since the ban on cryptocurrencies in China, the topic of NFTs has fallen under a legal gray area.
China has unveiled plans to launch the first state-owned NFT marketplace. The marketplace, whose name translates to “China Digital Asset Trading Platform,” will launch on January 1 at a physical event in Beijing.
According to the report, the platform is built on a unique blockchain, the China Cultural Protection Chain. It will also be run by China Daily, China Technology Exchange, Art Exhibitions China and Huban Digital.
Using the platform, Chinese NFT traders will be able to purchase NFTs as well as digital copyrights and property rights. This is quite similar to what you get for digital works of art that can be traded on closed and heavily regulated platforms.
State-owned NFT Marketplace will increase regulatory oversight
Since the ban on cryptocurrencies in China, the topic of NFTs has fallen under a legal gray area. While the country has a love-hate relationship with digital currencies, it has been more receptive to NFTs. However, the government advises against the use of NFTs as speculative assets.
According to an unnamed source, the state-owned NFT marketplace will help “regulate and avoid excessive speculation in secondary [NFT] markets.” Apart from this, the government has also taken steps to regulate the assets and differentiate them from what is available elsewhere.
For example, the country favors the use of the term “digital collectibles” over NFTs. Consequently, Ant Group and Tencent changed the site’s NFT references to “digital collectibles” in October. The collectibles can also only be built on approved blockchains with limited access.
Again, NFTs in China can only be bought with fiat. Despite the limitations, NFTs remain popular among Chinese traders. The Chinese NFT industry is projected to grow by 69.5% to reach USD 4,882.5 million by the end of 2022.
Law Court: NFTs are virtual property
Meanwhile, the Hangzhou Internet Court has recently applied property laws to NFTs. The court ruled that NFTs are virtual property protected by law. While acknowledging that Chinese laws are not specific about the “legal characteristics of digital NFT collections”, it confirmed that the assets should be protected by law.
According to the court, collectibles have “the object properties of property rights such as value, scarcity, controllability and tradability”.
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An experienced writer with practical experience from the fintech industry. When he is not writing, he spends his time reading, researching or teaching.
