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Chinese tech firms pledge to ban NFTs

Chinese tech and internet giants have signed one initiative. It is about banning crypto and NFTs and a promise of not establishing any secondary marketplace. As per a report, Tencent and Ant Group have joined one industry initiative that is self-driven. It is about banning crypto and fighting speculation. One of the most successful tech and internet businesses in the world, Baidu too signed this agreement. Many renowned companies such as Alibaba have signed on to this proposal too. Individuals who are part of the characteristic features of Bitcoin business were the major driving force behind this initiative’s formation.

Ban imposed on NFTs and crypto marketplaces

The pledge is never legally binding. It will acknowledge the current regulations of the crypto sector that will guide the blockchain-based products of the country. Industry players are never committed to setting up any secondary market for fighting speculation.

Specific content mainly includes that this platform must have necessary qualifications according to the law, and ensure all security and blockchain controllability. It must stick to the real name system. It should also solidify the creation of any intellectual property protection capability. Also, it must strongly oppose the prevention of malicious speculation. It must advocate rational consumption.

The proposal is not part of the government’s stance

This proposal has been prepared by one industry association along with different market operators. But it is not representing the stand of the official government. Depending on the present laws of China, digital collectibles in this country are usually viewed as another market from the worldwide NFT market. They are very liquid.

No company is needed for setting up any centralized marketplace for facilitating bidding or matching or even anonymous trading. Yet the proposals never indicate if private transactions are too banned. The tech giant’s pledge follows one earlier pledge by significant financial firms in China. It aims at hedging all risks associated with the crypto sector.

The government of China released a statement that required platforms selling digital collectibles will be needing real-name authentication of people who are issuing, selling, and buying the assets and only supporting legal tender as the settlement and denomination currency. It is as per the document that has been signed by the biggest tech firms in China.

This declaration needs that such platforms stick to the statement. It was part of the declaration as one of the prerequisites that must be satisfied. It also added that it never contains financial assets or any unlicensed financial product such as securities, credit, insurance, and valuable metals in goods that are blockchain-supported.

The stance of the financial sector on NFTs

This April, the National Internet Finance Association of China, the Securities Association of China, and the China Banking Association issued one joint statement prohibiting the NFTs’ usage in the issuance of financial assets.

As a consequence, such a prohibition was enacted. The use of NFTs in the process to produce financial assets were specifically banned within this proclamation’s parameters. As such a moment arrives now, everyone will get a chance to hear this message.

Even after the tough stand of China on NFTs, Tencent, JD.com, and Ant already entered the space of digital collectibles. These companies have launched their NFT marketplaces on some private consortium chains. Thus users can only shop there with Chinese fiat currency. Also, the organization has acknowledged it due to the increase in digital collections as there is a requirement of introducing risk controls.

This new initiative called upon tech firms not to set up any centralized marketplace for any bidding, matching, or anonymous NFT trading. The government of China banned Bitcoin mining last year in July. The People’s Bank of China has some plans of launching its central bank digital currency called the digital Chinese Yuan. Their team is now working on this endeavor’s specifics. Also, the company wishes to launch its crypto driven by blockchain technology.

Conclusion

The country has banned every crypto transaction such as Bitcoin transactions since September 2017. They barred foreign crypto exchanges to operate within the country in the year 2018. They enacted such limitations and crypto use was thus intended to be lowered as much as feasible.

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