cryptovibes.com
A self-control campaign for the NFT market in China has been released, promising user identification verification, in applications with the nation’s cryptocurrency ban, and a pledge not to create secondary marketplaces in order to combat speculation.
The 14-article document, which has the support of many of China’s largest tech companies, stipulates that: platforms offering digital assets, collectibles, and alike, will need real-name identification of people who purchase and exchange assets and will only accept real money as a trade currency. The ‘digital collectibles’ is the term used in mainland China for NFTs that cannot be traded using cryptocurrencies.
The CCIA (China Cultural Industry Association) this week issued the report, an attempt by private businesses that isn’t enforceable by law. A large number of players in the Chinese market for digital collectibles have joined, including Ant Group, Alibaba Group’s affiliate that owns South China Morning Post, Baidu, JD.com, and Tencent Holdings.
What is this agreement for?
The pact instructs participants to firmly fight market speculation. It stipulates that blockchain-enabled objects do not include capital instruments or unlicensed investment vehicles such as stocks, insurance, loans, or hard assets.
According to the agreement, outlets for virtual collectibles should possess the necessary licenses, such as those needed by Blockchain vendors, online culture providers, and telecom company operators.
The effort, according to Luo Jun, secretary China Computer Industry Association’s metaverse, recognizes the application of NFT technology in artistic product registration and intellectual property rights. However, Luo asserts that additional regulation is required to reduce financial risks given that cryptocurrencies are illegal in China.
He noted that the industry organization and several market participants, which don’t reflect the government’s perspective, organized the proposal.
He Yifan, CEO of Red Date Technology, a company that develops blockchain technology and offers technical support to the Blockchain Service Network of China, described the paper as an industry effort created in response to a previous one produced by key financial sector organizations to reduce the risks connected with digital content.
The Securities Association of China, the China Banking Association, and the National Internet Finance Association of China together released a statement in April outlawing the usage of NFTs in the issuing of financial tools such as Equities, insurance, credit, and rare metals.
How has China been dealing with this?
Well, NFTs are restricted by the government of China, but domestic businesses have been going towards working in the new industry. The very first Chinese tech behemoths to introduce digital collectible sites were Ant and Tencent. Following suit, JD.com launched its own site, and Baidu produced its own line of digital collectibles.
Similar rules apply to popular domestic platforms: users must submit identity documents, and owners cannot resell the things for benefit. An online collectible could be given away once the proprietor has had it for a predetermined amount of time.
Although the new restrictions do not specifically address the selling of NFTs, it does urge businesses to avoid creating centralized marketplaces for anonymous trade in general. Private transactions, however, cannot be outlawed, according to experts.