Government-backed group to set up NFT marketplace in China with secondary trading

Quick Take

  • Government-backed institutions say they will launch an NFT marketplace with secondary trading.
  • It will be built on a blockchain called the China Cultural Protection Chain.
  • But NFT-related projects have to tread carefully in China due to uncertainty about regulations. 

Homegrown NFT marketplaces in China haven’t had much luck so far. But one group thinks it’s time for another shot — and this time it has official support.

Plans for an NFT marketplace that will allow secondary trading, the China Digital Assets Trading Platform, were reported in state-run outlet China Daily on Dec. 28. 

The project includes two government-backed institutions: China Technology Exchange, an institution jointly established by state bodies including the Ministry of Science and Technology and the Chinese Academy of Sciences, and the China Cultural Relics Exchange Center, an institution under the State Administration of Cultural Heritage. They will work with Beijing-based company Huaban Digital Copyrights.

The Chinese government has made its dislike for crypto and the speculation that often comes with it known — trading currencies and mining have been banned several times to varying degrees of success. Despite this, it remains interested in blockchain technology. Several cities and provinces are currently running their own metaverse projects, while in September it extended its CBDC project to several additional provinces.

China vs. NFTs 

The picture is more complex for NFTs. Digital collectables are usually sold for fiat and aren't allowed to be used for speculation. But regulation for NFTs remains murky and top tech companies such as Tencent have launched platforms only to later mothball them. 

This move doesn’t mean Bored Apes and Meebits could be coming to an official Chinese state NFT marketplace anytime soon either. The China Digital Assets Trading Platform will be built on the China Cultural Protection Chain, a blockchain created by Huaban and the China Cultural Relics Exchange Center.

It's not clear what the final product will look like. Chiefly concerned with organizing historical and cultural exhibitions both within China and internationally, the Center has previously shown interest in how museums and other cultural institutions can use NFTs. The upcoming marketplace may be geared towards these sorts of NFTs too, albeit with the added function of allowing people to trade what they sell. 

How this squares with the government's concerns about speculation in NFTs and crypto is also not clear. But museums around the world have experimented with NFTs as a new source of funds as well as a way to reach younger audiences. 

A heritage park in Xi’an sold 30,000 NFTs in nine minutes on auction platform Taobao in March, netting 600,000RMB ($86,000).

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