Report: China plans to launch a government-backed NFT market for digital assets

Authorities in China are planning to launch a nonfungible token marketplace in order to help control speculation on digital assets and provide a stable, government-controlled platform for secondary trading in the country.

The “China Digital Asset Trading Platform” was built in partnership China Technology Exchange, a national intellectual property and technological property rights trading institution, the China Cultural Relics Exchange Center and blockchain developer Hanban Digital Copyright Service Center Co. Ltd., a report from state-controlled media outlet China Daily revealed on Wednesday.

The launch ceremony for the new marketplace is planned for Jan. 1, 2023.

The China Technology Exchange Center will provide the standards for trading processes and settlement mechanisms for digital assets including all tradable digital assets registration, such as confirmation of rights, depository, rights protection monitoring and copyright protection services.

Nonfungible tokens, or NFTs, are a type of crypto asset that uses blockchain technology to represent the ownership of a digital item such as artwork, music, video, documents or in-game items. They can be bought, sold and traded and as a result, they have come to hold real-world value and driven market speculation for digital collectibles and intellectual property.

The exchange will facilitate the purchase, sale and trade of intellectual, scientific and technological property rights across China using a technology known as the “China Cultural Protection Chain.” The infrastructure was established by the China Cultural Relics Exchange Center for the purpose of becoming a cultural copyrights library that would house the NFT transactions.

The new marketplace would become the central marketplace for the sale and trade of NFTs in China as the country has been cracking down on cryptocurrencies. This was the reason behind Chinese internet giant Tencent Holdings’ shutdown of its NFT platform Huanhe in August, one year after its official launch. WeChat, a popular social media platform run by Tencent, also suspended accounts associated with NFTs in March.

Although NFTs can be purchased and traded in China, they cannot be bought or sold for cryptocurrencies following regulatory crackdowns. However, they are still exchanged in alternative markets for yuan and dollars, and are not referred to as NFTs but instead as digital collectibles.