NFT platforms in China are growing 5X in four months despite warnings from the authorities

The popularity of non-fungible tokens (NFTs) is increasing as recent data shows that the number of digital collection platforms in China has grown to over 500, a 5X increase from February 2022, when the total number of NFT platforms was just over 100.

According to a report published by a local Chinese daily, the sharp increase in the number of NFT platforms comes amid the growing hype and popularity of the digital collectibles in the country. Major technology giants, including Tencent and Alibaba, have shown interest in the nascent area and have filed several trademark patents.

The increase in interest in digital collectibles in China comes despite several warnings from local authorities. The government agencies believe the Chinese NFT market is filled with speculation focusing on the secondary market, which poses an inherent risk to investors.

NFTs also became a way for people to express themselves digitally during the severe COVID-19-induced shutdowns in China. Residents of Shanghai listed hundreds of NFTs at Opensea in May on top of the government shutdown.

Due to the lack of regulatory oversight, individuals and businesses continue to engage with digital collectibles, but with a cautious approach to avoid direct conflict with government. Alibaba recently launched a new NFT solution and then immediately deleted all reviews of it online.

Alibaba-affiliated companies such as Ant Group and Tencent Holdings have relocated to avoid potential regulatory setbacks in the past by labeling their listed NFTs as “digital collectibles.” They are also offered on private blockchains and traded / purchased with Chinese fiat currency.

Related: China-based regulatory and trade associations are targeting NFTs in the latest risk warning

Similarly, several internet giants and leading social media platforms in China are in conflict over regulatory clarity on NFTs and decided to remove more marketplaces from their platforms for fear of a government crackdown.

The Beijing government’s strict stance on the crypto market is well known, but the ban on decentralized technology has proved futile. The ban on crypto-mining, which once led to a 50% drop in the BTC network’s hash rate, could not completely overshadow the country’s mining industry, and China is currently back in second place after the US in terms of cannabis contributions. Bitcoin (BTC) network.