As China’s tech giants work together to set standards for the new industry, the future of non-fungible tokens is becoming clearer.
Along with Tencent, Ant Group, Baidu, and others, the China Cultural Industry Association released a “self-disciplined development proposal” for the “digital collectible industry.” This is a new name for NFT in China, which gets rid of the financial aspects of the technology.
Even though industry associations don’t have the power to regulate, they can help an industry come up with standards and best practices. The State Council gave the China Cultural Industry Association permission to start up, and its website says that Alibaba and Tencent are among its members.
People in China who are interested in NFTs have been waiting for regulatory guidance from the top. After China made it illegal to trade cryptocurrencies, people thought that NFTs in their purest form, in which cryptocurrencies are traded freely and anonymously on global, public blockchains, would not be allowed in the country.
It looks like that’s the case. In April, China’s financial groups said that NFTs shouldn’t be securitized or traded in cryptocurrencies.
China’s largest platform operators have taken a stand, which could be a step toward regulating the NFT industry. Tencent, Ant Group, and others have put out a proposal that says digital collectible platforms should have the right licenses, make sure the blockchain technologies they use are safe, check the real identities of users, protect intellectual property more, ban financial speculation, and encourage users to use less.
Before NFT regulations went into effect, tech companies in China were testing the waters. Big companies like Tencent, Ant Group, and Baidu have all opened digital collectible marketplaces that are based on private consortium chains. Users can only buy things with the Chinese fiat currency RMB, and most people aren’t allowed to sell them on the secondary market to stop price gouging.
One company decided to look into NFTs all over the world, not just in China. In April, Bilibili, China’s most popular user-generated video streaming site, asked a Singaporean company to create a collection of Ethereum-based NFTs based on the site’s brand assets.