On January 1, China’s first non-fungible token (NFT) market will open in Beijing, capital of the Republic of China. This shows that the country continues to rely on technology.
Opening of a government-sponsored NFT market in China
China’s digital asset exchange, known as the state-backed marketplace, will open in Beijing on January 1, 2023. The controlled platform is intended to function as a secondary marketplace where users can exchange digital collectibles, property rights and trademarks.
According to a report by Sina News, the state-run China Technology Exchange, state-run Art Exhibitions China, and a private organization called Huban Digital Copyrights Ltd. work together to manage the NFT platform.
The report also states that the platform is built on the “China Cultural Protection Chain,” a permission chain as opposed to the permissionless chains of traditional NFTs. Strict regulations restrict the type of digital art produced on blockchains.
Chinese virtual currency and metaverse expert Yu Jianing believes the establishment of the China Digital Assets Exchange will lead to the virtual transformation of the country’s cultural industry.
Earlier, China’s central bank announced its plans for the CBDC and made available trial versions of mobile apps for yuan digital wallets.
However, in 2021, China issued a regulation prohibiting all cryptocurrency transactions, thus also banning digital tokens like bitcoin. The country has also cracked down on those who mine cryptocurrencies. Several cryptocurrency companies in China like Huocoin, Binance, BiKi, BHEX and others were forced to shut down due to the ban.
But as the government tries to control them, the country is starting to take an interest in the Metaverse and NFTs. Zhejiang Province in eastern China recently said it plans to create more than 200 billion yuan of Metaverse-related businesses by 2025.
China and NFTs
For NFTs, the situation is more complicated. Digital collectibles are often sold for fiat currency and cannot be exchanged. However, the NFT law is still unclear and major internet companies like Tencent have established networks and then mothballed them.
The move also means Bored Apes and Meebits are unlikely to appear on an official Chinese NFT market any time soon. The Chinese Cultural Preservation Chain, a blockchain developed by Huaban and the Chinese Cultural Relics Exchange Institute, will serve as the basis for China’s digital asset exchange platform.
What the finished project will look like is unclear. The institute has already expressed excitement about how museums and other cultural centers can use NFTs. The institute mainly deals with the planning of archaeological and ethnic exhibitions in China and around the world. These types of NFTs could also be eligible for the next market, but with the added benefit that people can also trade what they’re selling.
It is also unclear how this relates to government concerns over NFT and cryptocurrency speculation. However, museums around the world have tested NFTs as a unique source of funding and as a way to engage young people. In March, a heritage park in Xi’an raised 600,000 RMB ($86,000) after selling 30,000 NFTs on auction site Taobao in just nine minutes.
Although NFTs are not as popular as elsewhere in the world, they have been very popular with Chinese merchants over the past couple of years. According to local regulations, NFTs cannot be purchased with cryptocurrencies in China and are instead referred to as digital collectibles.
Also, no open, but closed and strictly regulated platform is used for trading digital artworks. When a Chinese court ruled earlier this month that digital assets have the same property rights as products sold on e-commerce sites, it marked a major step forward in the protection of digital assets.