Chinese Regulators Demand NFT Regulations: Tencent Halts NFT Platform in June
As the NFT industry in China has rapidly grown over the past year, a proposal to establish a regulatory system for NFTs has been put forth at the ongoing “Two Sessions” – the National People’s Congress and the Chinese People’s Political Consultative Conference, by Feng Qiya, the chairman of Shanghai Xinhuan Investment Holdings and a member of the National People’s Congress.
According to Shanghai Securities News on March 9th, Feng Qiya pointed out that the regulatory system for NFTs in China currently relies on industry self-regulation and regional regulations, and that there is a lack of a top-down regulatory system. Furthermore, the legal status of NFTs is unclear, given their digital nature and their potential overlap with digital assets and copyrights.
Feng Qiya emphasized that various institutions should jointly adopt NFT regulatory measures and establish a clear regulatory authority to define the legal status of NFTs, as they encompass various fields and require comprehensive and careful supervision.
The NFT industry in China has seen explosive growth, with 15.3692 million NFTs issued in the first half of last year alone, with a total issuance value of CNY 653 million (approximately USD 94 million).
However, Feng’s proposal for NFT regulation comes amid a growing trend of regulatory scrutiny over the crypto industry in China. Last year, the Chinese government imposed a blanket ban on cryptocurrencies, leading to the suspension of Tencent’s NFT platform “Fantasy Core” on June 30th this year.
The initiative, known as the “Digital Collectibles NFT Industry Self-Regulation Development Initiative,” was launched by over 30 Chinese tech companies, including Alibaba’s Ant, Tencent, Baidu, and JD.com, in June 2020. While NFT purchases remain possible, the initiative bans resale and over-the-top advertising.
As the NFT market continues to grow in China, the proposal to establish a regulatory system for NFTs is expected to garner more attention and scrutiny from both industry insiders and regulators alike.
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