China Creates Own NFTs, Continuing Trend of “Borrowing” Western Tech

The People’s Republic of China has revealed intentions to introduce its version of NFTs, albeit an uninteresting variety. The news comes after the  South China Morning Post, recently published a white paper.

The document details an NFT mechanism for archiving historical assets on state-approved blockchains. It is worthy to note that China recently banned all crypto-related activities, causing residents who still wish to trade digital assets to turn to virtual private networks (VPNs) to access crypto markets and services.

NFT Market Volume Dips

Globally, the NFT marketplace has seen a drastic fall in volume since the highs witnessed in the summer of 2021. Data released by Nansen Blue Chip Index, a crypto analytics firm, reveals plummeting liquidity in the NFT space over the last three months. The reports also highlight a fall in the market capitalization of the top 20 digital collectibles studied.

After hitting a record high of 4.5 million ETH in late August, trading volume has slumped below 4,000 ETH. The chart shows that this represents a more than 99.9% decline in less than three months.

Given the current state of the NFT market, it is worth stating that China hopes to leverage a possible future rebound to latch onto the growing frenzy of digital arts. Hence, its push to provide support through a state-backed infrastructure.

Chinese Companies Lean Into NFTs

Several Chinese companies are taking advantage of the NFT boom to venture into the businesses of creating and sharing these assets. Tech giant Alibaba has now opened a marketplace where artists may develop “digital collectibles” to protect their work’s copyright.

The term  “digital collectibles” represents the version of Chinese NFTs local authorities intend to maintain. Chinese regulatory authorities have strengthened their supervision of NFTs as it represents a potentially significant bubble. As a result, it met with the most prominent Chinese tech companies offering NFT services. Popular Chinese journalist Colin Wu corroborated this meeting in this tweet.

Following the meeting, Alibaba and Tencent, which launched support for NFTs, removed all traces of the word “NFT” from their platforms. This is most likely to be in compliance with Beijing authorities who have now taken a keen interest in the potential of NFTs or rather “digital collectibles”.

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History Simply Repeating Itself

China’s desire to create its version of NFTs follows a historical trend. Chinese authorities have in time past banned western tech innovations within their country while going on to make their version.

Facebook, Youtube, Google, Whatsapp, and Bitcoin have been replaced by Weibo, Youku, Baidu, WeChat, and the e-Yuan currently being trialed.

The new restrictions put in place have caused more western tech companies to pull out their services from China. Yahoo, LinkedIn, and the gaming platform Fortnite have all recently suspended their services. They all cited a more challenging operating environment and more stringent compliance requirements in the country as their reason for relocating.

The Chinese authority’s clampdown on the tech sector may align with its need to track and monitor user data. The ban of foreign tech companies and the creation of indigenous, state-owned alternatives would enable them to achieve this goal quickly.

Do you think China will cut a decent share of the NFT market amidst the growing mania in digital collectibles? Let us know in the comments below.