China’s tech giants are trying to shift Non-Fungible Tokens from a speculative asset class to intrinsic value assets. The group includes top tech companies joining hands to address one of the major issues that secondary buyers face. So what’s the deal?
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The new NFTs
There’s no standard mechanism to value NFTs, and the creator weighs the value of the NFTs concerning the hype they create, and money pours into extensive marketing. The lack of a proper NFT valuation system is the problem that keeps many investors diving into NFTs.
Those who mint still remain in a better position, but the secondary buyers suffer even more as the new owners of digital assets ask for an unrealistic price. For instance, Cope Bear, an NFT project, has a floor price of 0.047 ETH. However, one of its NFTs was sold for 0.0689 ETH a few hours ago, and guess what? The new owner listed this NFT 1000x time expensive for 69 ETH.
China’s Cultural Industry Association is joining hands with tech giants like Tencent, Ant Group, Baidu, and many others to formulate standards for NFT to add more clarity. The group has coined a new term for NFTs “digital collectible industry,” as stated in a recently issued proposal. In this “self-disciplined development” proposal, the China Cultural Industry Association stated its intentions to address the NFTs’ financial aspects.
Clearly, you must be thinking, “but China has already banned cryptocurrencies altogether”, well, yes. In a recent judgment, it was made clear that only ICO (Initial Coin Offering), Cryptocurrency mining, and, cryptocurrency transactions were banned. NFTs have an exception if these assets are not used for securitization and transacted in cryptos. The tech giants, therefore, are joining hands to use blockchain to benefit from it where they can. Although the state council approves the Cultural Industry Association, and it is influential that it counts Alibaba and Tencent among its members, this company does not hold any regulatory power.
China is a large market and has produced products like Binance, the cryptocurrency’s largest Exchange. If there comes a proposal based on facts and local regulations by such a large and influential group, this will be like showing a way to the NFT enthusiasts. Even without any regulatory power, the NFT projects will try their best to abide by the rules to capture the largest market that understands NFTs.
Conclusion
China is allowed to only trade digital assets in its local fiat currency RMB, and secondary sales of the NFTs are still prohibited to avoid speculative trades. Not sure if NFTs can survive so many limitations; however, at least the Chinese now have conditional access to blockchain assets.
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sources: techcrunch
author: mnmansha
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
