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NFTs
TechPolicy

China to create own NFT industry based on state-backed blockchain infrastructure, main developer says

  • The BSN-Distributed Digital Certificate does not support crypto-transacted NFTs, and will allow businesses and individuals to build apps and portals to manage tokens
  • The new infrastructure has the potential to disrupt the current industry, having already attracted more than 20 partners

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The BSN was founded by Red Date along with state-owned China Mobile, China Union Pay and the State Information Centre. Photo: Handout
Coco Feng

China’s state-backed Blockchain Services Network (BSN) plans to roll out infrastructure at the end of this month to support the deployment of non-fungible tokens (NFTs), a major step to creating a Chinese NFT industry that is not linked to cryptocurrencies.

Although Beijing has banned cryptocurrencies, He Yifan, chief executive of Red Date Technology, which provides technical support to BSN, told the South China Morning Post that NFTs “have no legal issue in China” as long as they distance themselves from cryptocurrencies like bitcoin.

The infrastructure, named the BSN-Distributed Digital Certificate (BSN-DDC), to differentiate it from crypto-transacted NFTs, will offer application programming interfaces for businesses or individuals so they can build their own user portals or apps to manage NFTs. Only Chinese yuan is allowed for purchases and service fees.

“NFTs in China will see annual output in the billions in the future,” He said in an interview.

NFTs are launched and traded on public blockchains, which are decentralised platforms that provide access to anyone wanting to write and read data. However, public chains “are illegal in China” as the state requires all internet systems to verify user identities and permit the regulator to intervene in the event of “illegal activities”, He said.

As such, Red Date turned to a solution called the open permissioned chain, an adapted version that can be governed by a designated group. BSN, the NFT project’s underlying platform backed by state-owned China Mobile, China UnionPay and State Information Centre, has already “localised” more than 20 public chains since its 2018 debut.

He said that BSN-DDC will integrate 10 chains, including the adapted version of Ethereum and Corda, plus domestic ones like Fisco Bcos, initiated by Tencent-backed fintech firm WeBank.

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