• The Chinese government has announced plans to launch a state-backed “non-fungible token (NFT)” marketplace.
• 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.
• Chinese firms have been encouraged to label their products as “digital collectibles”, rather than NFTs, and limitations have been placed on secondary market trading in a bid to reduce “speculation” on NFT prices.
The Chinese government has recently announced plans to launch its own version of a state-backed ‘non-fungible token (NFT)’ marketplace. This comes in response to a ruling from the Hangzhou Internet Court last month which stated that virtual items such as NFTs can be legally recognized as property. The China Digital Asset Trading Platform, as the marketplace is being called, is set to go live on January 1st and will be an official secondary market for digital assets that comply with national regulations.
However, the Chinese government is not using blockchain to power its platform and instead is looking to fiat as the marketplace’s currency in order to sideline all crypto assets. In order to reduce ‘speculation’ on NFT prices, Chinese firms have been encouraged to label their products as ‘digital collectibles’ rather than NFTs, and limitations have been placed on secondary market trading.
In other parts of the world, blockchain networks are used to mint NFTs and they can be traded for tokens such as Ethereum (ETH). But the Chinese government is aiming to cherry-pick technological advances associated with crypto and the blockchain space – mainly private blockchain networks and NFTs.
The platform will be similar to other NFT trading platforms, with buyers and sellers able to trade digital assets with each other. Additionally, the platform will have a range of services such as asset storage, asset security, and asset transfer.
The Chinese government’s move to launch its own version of an NFT marketplace is a step towards regulating the sector. It remains to be seen if the platform will be successful, but it could pave the way for more state-backed NFT marketplaces in the future.