March 29, 2024

Tencent and Alibaba, Two Chinese Internet Giants, are Strengthening NFT Rules, and Here’s why

Tencent and Alibaba, two of China’s largest internet companies, have tightened some of its NFT marketplace rules as a precautionary move to avert more government crackdowns. NFTs are a sliver of hope in China’s otherwise adamant anti-crypto position.

NFTs are classified as “digital collectibles” under Chinese legislation and are still technically lawful for distribution and collection. Trading between third parties, on the other hand, is outlawed as part of China’s sweeping anti-cryptocurrency crackdown, which began in 2021.

Chinese Internet Companies are Fearful of Increased Scrutiny

The two of China’s biggest tech companies, Alibaba and Tencent have recently updated their terms of service to further strengthen rules that could help protect against unlawful deals on their platforms. Jingtan, a digital collectible platform from Alibaba said it would take action against users who buy collectibles in mass using bots or other specialized software.

According to a report in the South China Morning Post, the platform said that it would alert the police to any users who organized transactions outside the platform in a manner that might be considered criminal. The wildly popular Tencent social messaging app WeChat, which was used for advertising some digital collectibles has banned all the programs that promote NFTs on the platform.

However, Tencent’s stand-alone NFT marketplace, Huanhe, has not altered any of its terms of service as of the time of publication.

China’s Last Connections to Crypto: NFTs and CBDC Confirmed

Last year, the NFTs’ popularity as digital collectibles has helped keep a crackdown on crypto-related products out of the country. In spite of that, because digital collectibles are minted on a blockchain, they are in some way related to crypto, therefore, maintaining their status in the country is somewhat uncertain.

In China, NFTs can only be purchased with Yuan, and citizens are required to register with their real names. Most of the other marketplaces accept crypto rather than yuan, however. It is also forbidden in the country to buy and sell digital collectibles outside the market. 

The government of China has banned crypto for several reasons, including scrutiny of speculative trading and the creation of market bubbles. Nonetheless, blockchain technology remains a vital part of the country’s technology. To affirm this further, the government has released a digital version of its yuan currency earlier this year. The Chinese government has also been investigating an implementation of blockchain technology within its digital infrastructure.

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