The popularity of non-fungible tokens is on the rise, as recent data shows that the number of digital collectible platforms in China has grown to over 500, a 5-fold increase from February 2022, when the total number of digital collectible platforms NFT was just over 100.
According to a note published by a local Chinese newspaper, The sharp increase in the number of NFT platforms comes amid the growing anticipation and popularity of digital collectibles in the country. Major tech giants such as Tencent and Alibaba have shown interest in this nascent space, filing multiple trademark patents.
The surge in interest in digital collectibles in China comes despite several warnings from local authorities. Government agencies believe that the Chinese NFT market is full of speculation with a focus on the secondary market that poses inherent risks to investors.
NFTs also became a way to express themselves digitally during the strict COVID-19-induced lockdowns in China. Shanghai residents posted hundreds of NFTs on Opensea in May, at the height of the mandatory lockdowns.
Due to the lack of regulatory oversight, individuals and companies continue to engage in digital collectibles, but with caution to avoid any direct conflict with the authorities. Alibaba recently launched a new NFT solution and then promptly removed all mentions of it online.
Companies affiliated with Alibaba, such as Ant Group Y Tencent Holdings, have moved to avoid any potential regulatory pushback in the past by branding their listed NFTs as “digital collectibles.” They are also offered on private blockchains and traded/purchased using the Chinese yuan.
Similarly, several internet giants and major social media platforms in China are in conflict with regulatory clarity on NFTs and have decided to remove several markets from their platforms for fear of control measures from the government.
The strict stance of the Beijing government towards the cryptocurrency market is well known, however, the ban on decentralized technology has proven futile. The cryptocurrency mining ban, which once led to a 50% drop in the BTC network hash rate, failed to completely overshadow the country’s mining industry, and China is now back in second place. ranked after the United States in terms of the contribution of the hash power of the Bitcoin (BTC) network.
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