NFTs are becoming increasingly common throughout the world and appear to be slowly becoming a customary element in various types of transactions. However in China, Alibaba and Tencent recently renamed their NFT offerings "digital collectibles." We look at why and what it means.
Don't mention NFTs in China! The discourse in China is not about non-fungible tokens, but rather about "digital collectibles." This shift has just been implemented by retail giants Alibaba and Tencent against a backdrop of the Chinese government's anti-cryptocurrency stance. Chinese state media such as China News and China Daily regularly warn readers about the disastrous possibility of the virtual asset market bubble bursting. Additionally, the government's latest restrictions on the country's major technology firms have led to top-level executives fearing the party's retaliation.
NFTs are essentially digital works stored on a blockchain. This new technology enables the uniqueness of the work to be guaranteed and provides security elements for the creations' conservation or exchange. The overwhelming majority of NFTs can be acquired with cryptocurrency. However, since last June, the Chinese government has banned the mining of cryptomoney as well as its trade. As a result, NFTs are entering a grey area.
New regulations in view?
At one time, Ant Group, a subsidiary of Alibaba, used to offer NFT works such as digital paintings, digital wallpaper or virtual versions of antiques -- real collectors' items. Xianyu, a used goods marketplace from Taobao previously featuring NFTs, no longer gives any search results for this term. Meanwhile Huanhe, the NFT platform launched by Tencent in August, now calls these items "digital collectibles."
The Alibaba-owned group "firmy opposes any form of illicit activity conducted in the name of digital collectibles" or "price speculations" around digital collectibles, outlined a representative of AntChain, the Chinese giant's blockchain technology platform. For its part, Tencent said in a statement that it "does not tolerate any illegal activities, including those related to cryptocurrencies" and now bans the transfer of digital items between users.
While waiting to know the Chinese government's position on NFTs, Chinese companies prefer not to take any risks in case of an "NFT bubble" bursting. Xi Jinping's government might formulate new regulations in the next few months ahead of the launch of the Chinese digital yuan; which could take place in 2022.
