NFT platforms multiply in China, despite government warnings

NFTs are still pending regulation from China. Despite the ban on the use of cryptocurrencies last year, there is no law in place to prohibit the trading of NFTs. The Chinese government, however, warns of risks in investment.

Recent data shows that the number of NFT collectible trading platforms is multiplying. In just 4 months, the number of digital platforms has grown to over 500. In February 2020, the number was just over 100.

According to a report published by a local newspaper, the increase in the numbers of NFT trading platforms is justified by the rise in popularity of these assets. Giants like Tencent and Alibaba have registered several trademarks for NFT projects, which reflects their popularity well.

The Chinese government, however, remains apprehensive about the growth of this market. Government agencies warn of the high level of speculation, which increases the risks for investors.

In addition, NFTs have also become a way for people to express themselves digitally during China’s strict COVID-19-induced lockdowns. Shanghai residents have listed hundreds of NFTs on the opensea in May, at the height of the lockdown.

Despite the high popularity, trading in collectibles needs to be cautious. Most large companies offer NFTs on their own blockchain, with trading in local fiat currency.

No ban, but lots of warnings

Since the ban on cryptocurrency trading and holding in China, NFT platforms have been the subject of many warnings from financial institutions and authorities.

In April of this year, the China Banking Association, the China Internet Finance Association and the Securities Association of China issued a joint statement warning the public about the “hidden risks” of investing in non-fungible tokens, or NFTs.

In a notice, the three associations launched initiatives for innovation in the crypto and blockchain space focused on NFTs, as well as “resolutely curbing the NFT financialization and securitization trend” to reduce risks around illicit activities. The China Banking Association said member institutions should not consider NFT assets such as bonds, precious metals and other financial products.

“We solemnly ask consumers to establish correct concepts of consumption, increase their self-protection awareness, consciously resist NFT speculation and speculation, be vigilant and stay away from illegal NFT-related financial activities, and effectively protect their own security of property,” it said. the associations. “If relevant illegal activities are found, they must be reported to the relevant departments in a timely manner.”