China Bans Crypto But OKs NFTs for 1.3 Billion People

Over the past few years, China has been increasingly cracking down on cryptocurrency. In September 2017, China banned all ICOs and exchanges. And in 2019, they put a ban on crypto mining. Recently, China’s Central Bank issued a notice banning financial institutions from providing services related to cryptocurrency.

However, despite the crackdown on cryptocurrency, China has been accepting

of NFTs. In fact, China’s President Xi Jinping has recently spoken about the potential of blockchain technology and how it can be used to improve the country’s economy. This shows that while China may not be friendly to cryptocurrency, they are open to new technologies like NFTs.

China is not the on;y country that has banned or limited the use of cryptocurrencies within its borders.

• In its November 2021 update, the Law Library of Congress found that 42 nations have implicit bans on specific cryptocurrency applications. The following countries are among them: Bahrain, Burundi, Cameroon, Central African Republic, Gabon, Georgia, Guyana, Kuwait, Lesotho, Libya, Macau, Maldives, Vietnam & Zimbabwe*
  

  *(Accessed 5/17/22)

• The following Countries have outright bans on cryptocurrency products. In November 2021, the Law Library of Congress found nine nations with total bans on cryptocurrency: Algeria, Bangladesh, China, Egypt, Iraq, Morocco, Nepal, Qatar, and Tunisia,*
  

  *(Accessed 5/17/22)

China’s ban on cryptocurrency hasn’t stopped the growth of NFTs There.

NFTs are a new type of digital asset that is growing in popularity. They are unique and can’t be duplicated, which makes them valuable. And because they are stored on the blockchain, they are secure.

NFTs are also growing in popularity because they can be used to represent anything that is digital. This includes art, music, and even virtual real estate. And because they are still new, the potential for growth is almost limitless.

This month, the Blockchain Services Network (BSN), a Chinese state-backed blockchain company, is planning to roll out infrastructure that would enable individuals and businesses in China to create, sell, and purchase NFTs. He Yifan, chief executive of Red Date Technology – a company that provides technical support to BSN – announced the news to the South China Morning Post and explained that, as long as they are not connected to cryptocurrencies like Bitcoin (which are banned in China), NFTs “have no legal issues in China”.

He also stated that China blocks all public blockchains, such as Ethereum, & Solana which are used to support and track NFT trading. Instead, the BSN network will utilize adapted blockchains from Ethereum and nine other platforms that satisfy Chinese regulatory criteria, such as ensuring that all users authenticate their identities and allowing the government to intervene in case of “illegal” activity. The BSN will also offer a cross-chain gateway that allows NFTs to be traded on different blockchains within the network. Currently, the only blockchain that supports NFT trading in China is NEO, which launched its own NFT marketplace in March. NEO is trading at about $10.75 per coin at the time of this wring.

The launch of the BSN’s NFT marketplace is significant

because it will allow NFTs to be traded on a public blockchain for the first time in China. Up until now, all NFT trading in China has been done on private blockchain networks or through centralized platforms that are subject to Chinese government regulation. Although NFTs have not been expressly banned in China, they operate in a legal gray zone. In June, Alibaba launched a collection of 16,000 NFT artworks that sold out within minutes via its Alipay mobile payments app. However, the company was careful to draw the distinction between NFTs and cryptocurrencies. A spokesperson for AntChain, a blockchain subsidiary of Alibaba, stated that “NFTs are not interchangeable, nor divisible, making them different by nature from cryptocurrencies such as Bitcoin.” In the following months, other tech giants in China such as Tencent, Bilibili, and JD.com rebranded their NFT offerings as “digital collectibles,” a move that experts interpreted as an effort to avoid regulatory scrutiny.

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The future for NFTs in China and globally is looking very bright.

With the Chinese government recently announcing their plans to launch a national digital currency, it is clear that they are open to new and innovative technologies. This could mean big things for NFTs in China, as well as the rest of the world. There are already a few Chinese companies working on NFTs, and with the government’s backing, it is likely that we could see even more development in this area. With China’s population of over 1.3 billion people, there is a huge potential market for NFTs.

There’s one thing about cryptos and China that stays with me whenever I address their relationship. China bans cryptos like Bitcoin and Etherium but they are very well known for their production of crypto mining supercomputers like BitMain, with their ASIC (Application-specific integrated circuit) chips. This is a relationship we shall surely investigate further.

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