China reverses course on NFTs with platform launch
After years of checking crypto Beijing is warming to NFTs on its own terms
After years of hostility towards the digital asset sector, China appears to be taking steps to embrace non-fungible tokens.
The website of the China Digital Trading Platform (CDEX), a Chinese state-sanctioned secondary trading platform for NFTs and other digital assets, was launched on January 1.
Trade processes
The platform was created by China Technology Exchange, Cultural Relics Exchange and Copyright Service Center to standardize trading processes and eliminate black market speculation in digital assets.
The platform is quite rudimentary, with users unable to do much more than sign up for the platform, and it doesn’t support any digital asset collections yet. Ledger Insights reported that an innovation working group spanning Chinese museums, tourism organizations and rights holders is contributing to the project.
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A metaverse working group also contributes, and the report cites the growing use of metaverse avatars, clothing and art as inspiring CDEX’s creation.
The move marks a reversal after Chinese authorities have long sought to limit and ban cryptocurrency mining, payments and other activities.
In April, China’s banking, securities and internet finance associations said NFTs could be used as a vehicle for money laundering, illegal financing and unregulated speculative trading. They added that NFTs do not have to be issued to represent real-world assets such as securities, loans or precious metals.
Digital certificates
However, China announced in January 2022 that it would begin rolling out NFT infrastructure on its state-backed Blockchain Service Network. BSN emphasized that NFTs launching the network would have no links to cryptocurrency, with all NFT transactions settled in Yuan.
The NFTs will take the form of “BSN distributed digital certificates.” At the time, He Yifan, CEO of Red Date Technology, a Hong Kong-based fintech firm that co-founded BSN, said digital certificates could be used to modernize the issuance of educational qualifications, license plates and other certification schemes.
The Hong Kong government also issued entry tickets to Hong Kong Financial Technology Week as non-fungible tokens in October 2022. Token holders will be able to purchase discounted tickets to this year’s event.
