It has been a year since China banned cryptocurrency operations within its borders. The country warned that the financial impacts of digital currency could be detrimental to the financial sector. It also wanted to avoid the environmental impact of cryptocurrency mining on the environment.
Before the ban, China had one of the leading cryptocurrency industries. The ban changed that and forced many firms to move out of the region for more accepting countries like Ecuador and even the U.S.
China states that NFTs shouldn’t be traded with cryptocurrency
China’s securities, internet finance, and securities organisations state that Nonfungible tokens should not be exchanged with cryptocurrencies. Moreover, people should not use them to build securitised products. While the industry doesn’t have regulatory peers in the country, Chinese regulators are taking them very seriously.
Many experts believe that it is the end of NFT development in China. However, many of the tech companies in the country have shown interest in the space. Since trading cryptocurrency in China is legal, people can only use it limitedly.
Tech firms refer to NFTs as digital tokens
For instance, technology firms describe NFTs as digital collectables to distinguish them. Companies have been especially using them to finance their cultural and creative sectors.
While NFTs are minted on public chains like Ethereum and traded on open exchanges with other cryptocurrencies, China mints digital collectables on authorised blockchain that giant tech companies own. These companies also use their platforms to sell them.
People buy the collectables using the yuan fiat currency. Before they can be allowed to purchase anything, they have to prove their identities on the relevant sites. Moreover, they don’t have permission to resell the collectables in other spaces.
Since the Chinese government doesn’t think of digital collectables as NFTs, they are treated differently. As a result, they are also highly illiquid. Despite these obstacles, tech companies are still creating and selling their collectables, with others finding clients outside the county.
One major tech company in China that is involved in NFTs is Whaletalk. Whaletalk is a division of AntGroup that focuses on NFTs. This company mints NFTs on AntChain. Furthermore, its operations are led by AntGroup and its partners.