China’s top tech companies have created a “self-discipline initiative” to improve clarity in the NFT space.
Tencent, Baidu and JD.com were among the top Chinese tech companies that last week released a “self disciplined development proposal” for “digital collector industry”. This would implement real-name authentication for users who issue, buy and sell non-fungible tokens ( NFTs), according a South China Morning Post Report.
A statement from the China Cultural Industry Association states that the agreement’s signatories also acknowledged and reaffirmed existing regulations banning the use of cryptocurrency. It emphasizes that platforms offering digital collectibles, which is the term used in mainland China for NFTs, can only support legal tender, as well as settlement currency.
Additionally, digital collectible platforms must be certified by relevant regulatory agencies to ensure the security and protection of underlying blockchain technologies as well as intellectual property protection.
The document does not mention the resale or resale NFTs. However, the initiative promises to stop secondary markets for NFT trading and to “firmly resist speculation”.
The China Cultural Industry Association stated that domestic digital collections were more considered to be the category of digital creative creativity than foreign platforms using NFT technology.
Private companies are behind the latest initiative to China’s NFT Space. It is therefore not legally binding, but it could be a significant step towards more regulatory clarity. The proposals may be considered by state agencies that are responsible for developing industry standards.
Chinese authorities crackeddown on crypto businesses in China last year. They not only banned crypto transactions but forced many Bitcoin miners to leave the country.
However, the crackdown was not extended to the NFT space. China’s state-backed Blockchain Services Network announced in January that it had created its own platform for tokenized digital collectibles. It runs on a permissioned, private blockchain infrastructure, which allows no crypto transactions.
Tencent, Ant Group and Baidu, tech giants, have launched digital collectible marketplaces based on private chains. These marketplaces allow only purchases with Chinese yuan and ban secondary trading.
The April guidelines were issued by the National Internet Finance Association of China (China Banking Association) and the Securities Association of China. They prohibit the use of NFTs for the issuance of securities and loans.
