JD.com joins Alibaba, Tencent in launching ‘digital collectible platform’ amid NFT boom

Major Chinese online retailer JD.com has quietly joined other tech giants such as Alibaba Group Holding and Tencent Holdings in launching a blockchain-backed platform to sell “digital collectibles”, despite Beijing’s heightened scrutiny of the crypto assets.

While the five new series of digital assets listed on JD.com’s Lingxi platform are similar in form to non-fungible tokens (NFTs), they are not labelled as such.

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JD.com’s fintech arm JD Technology issued 2,000 pieces of each of the five types of digital collectibles, all related to the company mascot JOY Dog and priced at 9.9 yuan (US$1.55) each. As of Monday morning, all of them had been sold out, according to Lingxi, which is embedded into JD.com’s main app.

The e-commerce giant started utilising blockchain technology in 2017 to improve food supply chain tracking, traceability, and safety. In November this year, the company launched its first NFTs based on its blockchain ledger. At the time, JD.com described the offering as “NFTs” in its poster.

The move by JD.com is similar to recent launches by Tencent and Alibaba, owner of the South China Morning Post. China’s largest tech companies have embraced these new blockchain innovations despite Beijing’s scepticism of crypto assets.

The vast majority of NFTs outside China are created on the ethereum blockchain, but the trading of cryptocurrencies, including ether and bitcoin, is banned in the country. While the Chinese government has yet to formulate specific regulations around NFTs, state media outlets and officials have repeatedly warned against speculation and scams related to the digital tokens.

People’s Daily, the Communist Party’s flagship mouthpiece, suggested in September that a “huge bubble” was forming in the NFT market.

Earlier this month, an official at China’s central bank cautioned against leaving NFTs unregulated, warning that they could be used for illegal activities such as money laundering and tax evasion.

Amid government scrutiny, Alibaba, Tencent, and JD.com pledged in late October to avoid getting involved with cryptocurrencies and to prevent any associated speculation and money laundering, according to a statement released by Alibaba’s fintech affiliate Ant Group. Alibaba and Tencent have since rebranded their NFT offerings as “digital collectibles”, which cannot be resold on their platforms in compliance with Chinese regulations.

The global trading volume of NFTs hit US$10.67 billion in the third quarter of 2021, up 704 per cent from the previous quarter, according to a report from analytics platform DappRadar.