NFT platforms in China continue to increase despite government warnings
In late 2021, the Chinese government banned cryptocurrencies and all related activities. However, it has remained silent about Non-Fungible Tokens (NFTs) – another blockchain-based digital asset.
With what seems to be a government indifference to the crypto collectables, NFTs have fallen into a gray area as citizens are unsure about the authorities’ stance on NFTs. Nonetheless, the government is constantly issuing warnings about the risks associated with NFTs.
Tech giants have already taken advantage of the situation, as firms like Tencent and Alibaba have rushed to file multiple trademark applications to indicate their interest in the NFT sector.
Domestic crypto collectable platforms also seem to be encouraged despite warnings from the authorities. Based on local reports, the count of NFT platforms in China has surpassed 500, from a measly 100 in February this year.
The proliferation of these platforms is evidence of the populace’s increasing interest in digital collectables. Chinese authorities are discouraging the citizens because they believe the NFT market is volatile and full of speculation, which could be dangerous to investors.
Another reason why NFTs remain popular among citizens is because of how useful they proved in speaking out against the harsh COVID-19 lockdown in May. Hundreds of lockdown protest NFTs were listed on OpenSea during the period.
Although individuals and firms are participating in the NFT space, most are cautious about it, fearing future government regulations. Ant Group and Tencent Holdings have resorted to calling their crypto assets “digital collectables” instead of “NFTs.” Their NFTs are also minted on private blockchains and are traded in the Chinese yuan.
Others, fearful of a sudden regulation change, decided to discontinue support for NFTs and their related activities on their platforms. One of such is the social media company WeChat.
China’s ban on crypto mining activities has proven to be ineffective in recent times. The country remains the second largest provider of hash power to the Bitcoin network, following the U.S.