China has a clear stand in the cryptocurrency community. With social and economic stability as a concern, China has a dim view of its speculative, volatile crypto trading and its association with gambling, money laundering, alleged scams, and other problems.
However, it’s a different story when it comes to crypto’s blockchain technology. President Xi Jinping has urged mass adoption of digital ledgers to help turn China into an industrial and digital powerhouse and now the country is also embracing the craze for Non-fungible tokens– with conditions.
After banning individuals or businesses from raising money from crypto tokens. Crypto miners fled the country when regulators decided they would no longer tolerate the high energy consumption and carbon emissions associated with their business.
In this scenario hosting NFT’s is more or less impossible. But China has taken a different approach. It’s relying on so-called permission-based blockchains that operate under state oversight. No crypto coins are involved, with all payments made in the official yuan currency.
The system only permits the initial acquisition of an NFT with no secondary market where speculators bid up the prices of collectibles.
Ant Group Co. and Tencent Holdings Ltd. have pioneered an “alliance” blockchains controlled by groups of private companies under the authority of the government. Ant has launched a “Treasure Project” for museums and galleries to issue their digital collectibles, inspired by tiger-themed cultural relics, based on its blockchain technology.
Despite that the NFTs cannot be resold, people have been buying them in case they prove to be valuable over the long run. Big tech firms, retailers, and auction houses are joining the NFT craze to raise their profile and show they’re following the hottest trends. Even the official Xinhua News Agency has joined the party, offering collectibles based on selections of its news photography.
Digital collectibles bought on one of China’s tightly-controlled networks can’t be sold on global, independent platforms such as Ethereum. This scenario has created two parallel ownership regimes for NFTs. But to crypto purists, blockchains operated by companies and entities approved by the state as a sham.