The first state-backed non-fungible token (NFT) marketplace is being launched in China, the latest indication that the nation is embracing a technology that has been in legal limbo due to the nation’s extremely harsh crypto regulations. On January 1, Beijing will host a ceremony commemorating the marketplace’s opening.
According to a report by Chinese state media, the platform would be operated by three state-owned and commercial organisations: Huban Digital, a private corporation; China Technology Exchange, a government-backed entity; and Art Exhibitions China.
The “China Digital Asset Trading Platform” platform will be used to trade collectables as well as digital copyrights and property rights. As stated by the source, the platform’s underlying blockchain is known as the “China Cultural Protection Chain.”
For the majority of the past two years, Chinese traders have favoured NFTs, though not in the same ways as the rest of the world. The laws of China prohibit the use of cryptocurrencies to pay for NFTs, which are instead referred to as digital collectables.
The country has so far tolerated NFTs but prohibited trading in them. Chinese IT behemoths JD, Tencent, and Alibaba have developed their drives that let users buy and collect NFTs. They are not allowed to exchange or sell their purchases in any case.
Widespread rumours surround China’s position on non-fungible tokens (NFTs) in light of its disapproval of cryptocurrencies as of 2021. However, recent remarks from a Chinese court exhibit some encouraging characteristics.
NFT collections were recently determined to be online properties that needed to be protected by national legislation, according to a court in the Chinese city of Hangzhou.
According to the court, NFTs have “object features of “property rights” that call for national legal protection. The court also determined that it was required to confirm the legal standing of NFT digital collections and acknowledged that at that moment, the “legal qualities” of NFT digital collections are not expressly “stipulated” by the legislation.
However, the court recognised the attributes of NFTs in its statement, saying that they “condense” the original “expression of art” of the artist and have “value of intellectual property rights.”
Despite the country’s ban on cryptocurrencies, the Shanghai High People’s Court published a document in May 2021 claiming that Bitcoin is covered by property rights laws and regulations. The Chinese government launched a government-backed blockchain project to encourage the deployment of non-crypto NFTs purchased with fiat money to distance NFTs from cryptocurrencies.
Commercial trading of any kind of digital asset was prohibited in China due to the government’s clear restrictions on the crypto sector. The most recent news item offers additional proof that interest in digital assets has not been entirely stifled in China since the government announced a systematic crackdown on bitcoin in September 2021.