While there isn’t a formal restriction on the use of NFTs in China, unlike with cryptocurrencies, the government has occasionally cautioned investors about the hazards.
The number of digital collectible platforms in China has increased to over 500, a 5X increase from February 2022, when there were just over 100 platforms for nonfungible tokens (NFTs), according to current data.
A local Chinese newspaper reported that the fast increase in the number of NFT platforms coincides with the country’s growing interest in and craze over digital treasures. Major tech behemoths like Tencent and Alibaba have expressed interest in the emerging market and have submitted numerous trademark patent applications.
Chinese consumers’ interest in digital treasures is growing despite multiple warnings from the government. According to the government authorities, there are many speculative transactions on the Chinese NFT market, with a focus on the secondary market, which entails dangers for investors.
NFTs also developed into a means of digital expression for individuals in China under the tight COVID-19-induced lockdowns. When the government lockdown was at its worst in May, the people of Shanghai-listed hundreds of NFTs on Opensea.
Due to a lack of regulatory oversight, people and businesses continue to deal in digital collectibles, but they do so cautiously to avoid getting into trouble with the law. Alibaba recently introduced a new NFT solution and swiftly removed all online references to it.
Similar to this, major social media platforms and internet firms in China are split over regulatory clarity on NFTs and have chosen to eliminate a number of markets out of concern for a government crackdown.
The Beijing government’s tough approach to the cryptocurrency industry is widely known, but its attempt to outlaw decentralized technology has failed. The country’s mining industry survived the crypto mining ban, which once caused a 50% decrease in the hash rate of the Bitcoin (BTC) network. As a result, China is once again the second-largest contributor of hash power to the Bitcoin (BTC) network, behind the United States.