China might loosen crypto laws as authorities consider NFTs
In recent developments, China seems set to distinguish cryptocurrency from NFTs and relax crypto bans to nurture the local NFT industry.
Chinese Blockchain-based Service Network (BSN) - a government-backed blockchain project - is reportedly working on an infrastructure to support NFT deployment and use.
Called the BSN-Distributed Digital Certificate (BSN-DDC), this project would offer resources to individuals and businesses, allowing them to develop NFT management platforms and apps.
However, there is an exception; these NFTs must not be associated with any cryptocurrency. All forms of payments or transactions must be done in the Chinese Yuan.
Regular NFTs are built and traded on various decentralized blockchains – like Ethereum and Solana – which are illegal in China since authorities believe they are prone to illegal activities. However, Red Date Technology Ltd., one of the founding members and technical support provider to BSN, came up with an alternative.
Red Date offered a solution named the open permissioned chain, based on the decentralized blockchain. Rather than being decentralized with no central authority, the open permissioned chain is governed by a committee.
Since the open permissioned chain’s launch, over 20 public blockchains have been “adapted.”
BSN-DDC will integrate ten chains, including the adapted version of Ethereum and Corda and domestic ones like Fisco Bcos from fintech firm WeBank.
Seeing the opportunities that abound in the NFT space, China doesn’t want to fall behind in the NFT innovation, believing it can profit from it in the future.
He Yifan, CEO of Red Date Technology, believes; “NFTs in China will see annual output in the billions in the future.”
The BSN-DDC has already managed to get several partners on board, including the Cosmos blockchain network, digital receipt provider, Baiwang, and Sumavision.
He Yifan believes the most significant potential for NFTs is in certificate management, describing it as a “revolutionary database technology.”
He gave an example; “In NFT-based vehicle plate management, the car owner, government and insurer each have access to data such as mileage, engine number, and repair history, and each is aware of the others’ rights.”
NFTs were initially in a gray in China regarding the government’s stand. However, several big companies took advantage of the situation by issuing their tokens under the classification of “digital collectables.”
Ant Group was the first to embrace the technology, and it was soon joined by Baidu, and even state-run news outlet, Xinhua.