China unlikely to ban NFTs as ‘digital collectibles’ flourish, analysts say
- Beijing’s goal is to have a controlled market for blockchain-backed tokens similar to NFTs
- Analysts do not expect China to crack down on digital collectibles like it has with cryptocurrencies
The Chinese government is expected to keep a wary eye on the country’s mushrooming blockchain-backed “digital collectibles”, but it is unlikely to impose an outright ban on non-fungible tokens (NFTs) as it has done with cryptocurrencies, analysts said.
As global interest in NFTs surges, Beijing has kept its attitude vague towards domestic projects. While Chinese authorities reportedly summoned tech companies last October to warn them against “hyping up” the concept, they have stopped short of declaring NFTs illegal.
Chinese authorities are trying to ensure that NFTs are safe and controllable, analysts and industry insiders said.
“China is cautious about NFTs,” said Ma Xin, secretary of the Institute of Electrical and Electronics Engineers (IEEE)’s Digital Transformation working group. “China will not tolerate a NFT market full of scams just like the fake coins in the early days of blockchain development.”
He Yifan, chief executive of Red Date Technology which provides technical support to BSN, said that NFTs “have no legal issue in China” as long as they distance themselves from cryptocurrencies like bitcoin.
Beijing has shifted its attitude towards cryptocurrencies over the years. While it initially tolerated investment by individuals, the government eventually launched a forceful crackdown as it began to view cryptocurrencies as a threat to financial stability and capital control.