• The Chinese government has announced plans to launch a state-backed „non-fungible token (NFT)“ marketplace.
• The platform will go live on January 1 and will be an official “secondary market for digital assets that comply with national regulations”.
• Private blockchain networks and NFTs are being used, but crypto assets are being sidelined in favor of fiat yuan.
The Chinese government has recently made moves to enter the NFT space with its own version of a state-backed „non-fungible token (NFT)“ marketplace. The Hangzhou Internet Court ruled that virtual items such as NFTs can be legally recognized as property, and Beijing is now ready to launch the China Digital Asset Trading Platform on January 1. It will become an official “secondary market for digital assets that comply with national regulations”.
The government is determined to sideline all crypto assets and instead cherry-pick technological advances associated with crypto and the blockchain space. Private blockchain networks and NFTs are part of this picture, but firms have been encouraged to label their products as „digital collectibles“, rather than NFTs, and limitations have been placed on secondary market trading in a bid to reduce „speculation“ on NFT prices. Cryptocurrency will be replaced by the fiat yuan currency, and marketplace transactions will be recorded on centralized ledgers, rather than on the blockchain.
The Chinese government is placing a heavy emphasis on its own version of an NFT marketplace, and it’s clear that it sees potential in digital assets. Although it remains to be seen how this platform will be used, it could be a way of allowing Chinese citizens to access the virtual asset market. It is also possible that this platform could be used to provide a gateway to wider international markets, with digital assets being traded with foreign countries.
The Chinese government’s decision to launch its own NFT platform could be the start of something significant. It will be a test of whether the state-backed model can be successful in a space that has traditionally been dominated by decentralized networks. It will also be interesting to see how the Chinese government will continue to regulate the space, and if other countries, such as the United States, will follow suit.