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 are hot commodities in China despite ban on profit “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. Although NFTs are not illegal in China, several Big Tech companies have chosen to call their NFT projects “digital collectibles” for compliance reasons. Ant Group, the fintech affiliate of Post owner Alibaba Group Holding, and Tencent Holdings, were the first Chinese tech giants to embrace NFTs, launching dozens of products since last summer. JD.com and Baidu followed with their own digital collectibles. Even state-run media Xinhua News Agency jumped on the bandwagon, giving away more than 100,000 digital collectibles on Christmas Eve. The BSN-DDC infrastructure has the potential to disrupt the current industry. It has already attracted more than 20 partners, including Cosmos blockchain network, digital receipt system maker Baiwang, and video technology service provider Sumavision. He said that compared with other single-company platforms, BSN-DDC is compatible across chains and is cheaper: issuing an NFT can be as cheap as 0.05 yuan (0.7 US cents). He said that the project would turn a profit this year if it can help generate 10 million NFTs, “and the actual output will surpass that based on our predictions.” NFT is mainly used for digital art works, but He said the biggest market is certificate management, such as car licence plates and school diplomas as it is a “revolutionary database technology” that can differentiate different parties’ access to the data. In NFT-based vehicle plate management, the car owner, government and insurer each have access to data such as mileage, engine number and repair history, and each is aware of the others’ rights, He said.