The Chinese government has announced plans to launch its own version of a state-backed “non-fungible token (NFT)” marketplace. But Beijing won’t be using blockchain to power its platform. And it wants to do away with crypto as the marketplace’s currency – in favor of fiat.
Last month, the Hangzhou Internet Court ruled that virtual items such as NFTs can be legally recognized as property. And now, the China Daily reported, Beijing will launch the China Digital Asset Trading Platform (literal translation).
The government says that the platform will go live on January 1. Beijing says it will become an official “secondary market for digital assets that comply with national regulations.” China has effectively banned crypto trading.
And that has meant that conventional NFT trading has become almost impossible in the nation. In the rest of the world, NFTs are minted on blockchain networks, where they can be traded for tokens such as ethereum (ETH).
But while the Chinese government is determined to sideline all cryptoassets, it wants to cherry-pick technological advances associated with crypto and the blockchain space. Private blockchain networks and NFTs are part of this picture.
‘Digital Collectibles’ – China’s Take on NFTs
Chinese firms have been encouraged to label their products as “digital collectibles,” rather than NFTs. Limitations have also been placed on secondary market trading – in a bid to reduce “speculation” on NFT prices.
Although private sector secondary markets for “digital collectibles” exist in China, the fiat yuan is also used in these spaces in place of cryptoassets. Marketplace transactions are recorded on “centralized ledgers, rather than on public blockchain.”
Major tech companies such as Alibaba and Tencent have already launched their own crypto-free NFT offerings. They also operate their own (heavily regulated) marketplaces.
But the China Digital Asset Trading Platform will mark Beijing’s own debut on the scene.
The platform, the government indicated, will be tasked with “implementing” Chinese efforts to “digitize culture” and “develop cultural projects and industries through technical assistance and innovation.”
The platform’s operator will be the state-run China Technology Exchange, a body that governs intellectual property rights and IT-related matters. Also taking part in the project will be the China Cultural Relics Exchange Center. This organization deals with Chinese culture-related affairs.
A private, Beijing-based company that deals with intellectual property and “digital collectibles” transactions has also been recruited to help run the platform.