The Chinese government has decided to support technologies that operate on blockchains, such as non-fungible tokens. Even though the bans in China did not reach NFTs, they were in a gray area.
Official Chinese news agency Xinhua recently announced it would issue a collection of digital photographs in the form of non-fungible tokens (NFTs). The news agency itself released the information, which international media outlets such as Reuter replicated.
Many people interpret the announcement as support for specific uses for blockchains by the Chinese government. It is happening after China banned the activities related to Bitcoin and other cryptocurrencies.
The Central Bank of China said that business activities related to cryptocurrencies are illegal, reaffirming their policy against them. The monetary authority stated that those conducting them commit crimes and be subject to investigation, ratifying the policy implemented for at least three years.
The NFT collection will consist of a selection of digital photographic reports that reflect the historical moments of 2021. The Xinhua agency said they were adopting blockchain technology so that each image has unique identification and property information.
The news agency stated this first digital news collection would consist of 11 photos with special commemorative meaning and collectible value. They will issue the assets for free in a limited edition of 10,000 copies. However, they will also release some unique NFTs.
According to the announcement, the NFTs will be part of a metaverse, but there are no details. It is relevant to know that decentralized cryptocurrencies like Bitcoin are a crucial/essential part of the economy of those virtual universes.
China Goes from Banning Cryptocurrencies to Supporting NFTs
The Chinese government did not outlaw NFTs as part of the measures against the cryptocurrency market and the ban on Bitcoin mining. However, the lack of a direct pronouncement allowed McDonald’s, among other companies, to launch free collectibles.
The fast-food chain launched a collection of NFTs to celebrate the 31st anniversary of its entry into the Chinese market. As they award the tokens through a lottery, they would not be breaching the law against the trade of digital assets.
Some companies decided to refer to NFTs as digital collectibles to avoid using the word token, which links them to prohibited activities. AntChain and Tencent were among the firms that chose to take that route.
According to Reuter, the official endorsement by China of NFTs represents a novelty. At the same time, People’s Daily stated that non-fungible tokens were a possible fraud less than a month ago. The official media outlet of the Chinese Communist Party also referred to another official Chinese media outlet called Securities. The latter recently said that metaverses are an impractical and illusory concept.
The authorities of the Asian country recently reiterated their zero-tolerance policy with those challenging the bans on the cryptocurrency industry. They highlighted that they especially reject those who persist in mining crypto assets clandestinely.
The role of Bitcoin and other cryptocurrencies in the economy is increasingly evident, which Chinese regulators do not overlook. The ban on the trading and mining of crypto assets did not include some uses of blockchain technology such as NFTs. However, it does not allow selling or buying them in the territory.
By Alexander Salazar
