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A man looks at an NFT by artist Jen Stark. China is set to launch a platform for trading digital collectibles in January. Photo: AP Photo

China to launch national exchange for trading NFT-like digital assets despite cryptocurrency bans

  • The move reflects Beijing’s ramped-up efforts to expand China’s digital economy by applying commercial rules to data
  • China’s restrictions on the resale of NFTs, known locally as digital collectibles, is expected to be eased in the future, one expert says

China is introducing a “digital asset trading platform” to facilitate transactions of intellectual property and non-fungible tokens (NFTs), known as digital collectibles in the country, where cryptocurrencies are banned.

A launch ceremony will be held on January 1, according to state media China Daily. The platform is co-developed by China Technology Exchange, a technology trading service group backed by the government; Art Exhibitions China, an official agency; and blockchain developer Huaban Digital Copyrights.

The platform, which is built on the “China Cultural Protection Chain”, is designed to register, verify, deposit, track and protect digital assets, according to the report.


SCMP Explains: What are NFTs?

SCMP Explains: What are NFTs?

The move is “significant and valuable” because the platform can “provide a good mechanism for copyright and digital product trading in the future”, said Liu Jiahui, partner at Beijing-based Derun Lawyers, who specialises in intellectual property.

“Everyone will come to the platform, which is like an aggregator, for trading and searching for information, ” Liu said.

The news followed new policy guidelines released last week by the Central Committee of the Chinese Communist Party and the State Council, aimed at boosting the data market while addressing issues such as data rights and trading profit distribution.
It reflects Beijing’s ramped-up efforts to expand China’s digital economy by applying commercial rules to data, which the central government regards as a new production factor that is in the same category as land, capital and human labour.
Visitors take photos at an NFT-themed coffee shop in Beijing. Photo: EPA-EFE

Although Beijing firmly bans the trading and mining of cryptocurrencies, it offers some leeway for digital collectibles to exist as long as they do not involve the likes of bitcoin and ethereum.

A Chinese court said last month that digital collectibles should be categorised as “virtual property” and ought to be protected by e-commerce laws.

To differentiate from NFTs, digital collectibles in China are traded with legal tender and cannot be resold for profit. Such restrictions have cooled enthusiasm in the local market. In August, tech giant Tencent Holdings shut down its digital collectible platform Huanhe a year after launch.

Liu expects the curbs on the resale of digital collectibles to be eased in the future. “As virtual property, [digital collectibles] should be entitled to transactions. I don’t think the restrictions will last forever,” she said.