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Chinese tech giants join the state-backed efforts in regulating the digital collectibles by voicing support for the “self-discipline initiative” that ensures identity checks on users, adheres to the country’s ban on cryptocurrency and prevents the speculation of digital assets.
Tech Giants Tiptoeing In Line With Authorities
According to the statement by the China Cultural Industry Association, a state-supervised organization, the initiative has garnered support from domestic tech giants such as Tencent Holdings, Alibaba’s Ant Group, JD.com, and Baidu, which all have deep involvement with digital collectibles in the country.
Known for its anti-crypto stance, China refers to Non-Fungible-Tokens (NFTs) as digital collectibles, which only support the country’s legal tender, Yuan, as the settlement currency. The initiative reiterates such a stance and calls the giants to follow a set of guidelines to assist regulatory efforts.
Under the 14 articles introduced by the initiative, digital collectable platforms are expected to hold relevant regulatory certifications, bolster intellectual property protection, advocate real-name authentications, and avoid establishing secondary markets meant for speculative purposes.
Alibaba-owned South China Morning Post cited a source acquired from the blockchain industry in China, stating that the initiative does not “represent the government’s stance.” Rather, it is an industry-driven attempt to respond to the previous guidelines issued by government-managed industry associations, aiming to prohibit “the financialization of digital collectibles” through securities, insurance, loans, and precious metals.
The Rise of Digital Collectibles in China
Despite the government-issued warnings on the risk of digital collectibles, the number of domestic platforms that offer services in such trading has grown five times from February to June.
Meanwhile, tech firms stepping into this sensitive field in China remain low-key, as they tried not to cross the red line as dictated by the authorities. As expected, they all avoided using the term “NFTs” to describe digital collectibles, as regulatory authorities tend to link NFTs with speculations on cryptocurrencies.
Tencent and Ant Group have private and permissioned blockchains separated from the global NFT markets, mostly built upon layer-one blockchains like Ethereum, Solana, Flow, etc. In compliance with relevant regulatory scrutiny, platforms only let owners treat their assets as digital gifts absent from financial speculations.