NFTs

China Reverses Course on NFTs With Platform Launch

After Years of Checking Crypto Beijing Warms to NFTs on its Own Terms

After years of hostility towards the digital asset sector, China appears to be taking steps toward embrace nonfungible tokens.

The website for the China Digital Trading Platform (CDEX), a Chinese state-sanctioned secondary trading platform for NFTs and other digital assets, launched on Jan. 1.

Trading Processes

The platform was created by the China Technology Exchange, Cultural Relics Exchange, and Copyright Service Centre to standardize trading processes and eliminate black market speculation in digital assets. 

The platform is pretty rudimentary, with users unable to do little more than sign up for the platform, and it doesn’t support any digital asset collections yet. Ledger Insights reported that an innovation working group spanning Chinese Museums, tourist organizations, and copyright holders is contributing to the project.

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A metaverse working group is also contributing, with the report citing the increasing adoption of metaverse avatars, clothing, and art as inspiring CDEX’s creation. 

The move marks a reversal after Chinese authorities have long sought to restrict and prohibit cryptocurrency mining, payments, and other activities.

In April, China’s banking, securities, and internet finance associations said NFTs could be used as a vehicle for money laundering, illegal financing, and unregulated speculative trading. They added that NFTs must not be issued to represent real-world assets such as securities, loans, or precious metals.

Digital Certificates

However, China announced in January 2022 that it would begin rolling out NFT infrastructure on its state-backed Blockchain Service Network. BSN emphasized that NFTs launched the network would not have any links to cryptocurrency, with all NFT transactions settled in Yuan.

The NFTs would take the form of “BSN-Distributed Digital Certificates.” At the time, He Yifan, the CEO of Red Date Technology, a Hong Kong-based fintech firm that co-founded BSN, said digital certificates could be used to modernize the issuance of educational qualifications, vehicle license plates, and other certification schemes.
The Hong Kong government also issued admission tickets for the Hong Kong Financial Technology Week as nonfungible tokens in October 2022. Tokenholders will be able to purchase discounted tickets for this year’s event.

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