After China’s ban on NFTs and crypto, the tech giants are making an initiative to bring “digital collectibles” through self-regulation. The China Cultural Industry Association with Tencent, Ant Group, Baidu, JD.com, and others filed a joint development proposal pledging to make speculation-free NFTs.
China has been quite extreme about cryptocurrencies. As one of the biggest economies of the world based on technological innovations, the Chinese government collectively dismissed the idea of bringing the new economy including NFTs into the country.
China fears that unregulated digital currencies could sabotage its economy due to illegal financial activity or money laundering cases. The government claimed that the crypto market could create a pathway for smugglers and underground markets to make illegal transactions, and NFTs were part of it too.
However, seeing the rising popularity and worth of NFTs around the world, China’s tech giants are taking it upon themselves to develop in the name of “digital collectibles.” In other words, instead of calling non-fungible tokens NFTs, the Chinese people will call them “digital collectibles.”
China’s tech giants pledge to speculation-free NFTs
Due to negativity surrounding crypto and NFTs, China’s tech giants decided to look at non-fungible tokens from a different view. The China Cultural Industry Association, with Tencent, Ant Group, Baidu, and JD.com submitted a “self-disciplined development proposal” and mentioned the intention to promote the digital collectibles industry in China.
In the proposal, the companies mentioned that they won’t promote any secondary trading involving cryptocurrencies, but issue digital collectibles in their true form. It also mentioned the idea of adding user identification to ensure all transactions are self-regulated by the companies.
Instead of trading NFTs using digital currencies, the companies proposed trade through fiat currency. They will also work on providing intellectual property protection, ban financial speculations and promote rational consumption among users.
By self-regulating the blockchain platforms, the companies pledge to ensure no involvement of cryptocurrencies or illegal activities will be tolerated.
Before China put restrictions on cryptocurrency, tech giants have been making efforts to enter the NFT industry. Ant Group, Baidu, and Tencent already launched various digital collectibles on local NFT marketplaces to try out the local market’s reaction to the new technology.
However, just as the companies were making a breakthrough, the crypto ban came on. Users can still buy digital collectibles but only by using Chinese currency, RMB, and secondary trading is prohibited.
With the proposal issuance, the tech companies seem adamant about getting it approved by the government. The companies are still waiting for a response from the authorities.
The NFT industry globally seems to be tanking due to the prolonged bear market. Amidst this, Chinese tech companies are making an effort to launch their own digital collectibles on marketplaces.
Digital currencies and NFTs indeed lack proper regulations which could sabotage any country’s economy if adapted to traditional finance. Unless lawmakers and regulators make an effort to compose new regulations for the digital economy, countries like China will remain hesitant in lifting the crypto ban.
As a country known for being the pioneer of modern technologies, many tech companies feel they are missing out on the advancing blockchain industry due to the local ban.
If the authorities give a green signal to the digital collectibles proposal, China’s tech companies will be able to involve themselves in the developing technologies with self-regulation.