According to recent reports, China’s top financial authority has published a set of guidelines and a precautionary warning regarding the usage of NFTs.
China’s attitude toward cryptocurrencies has been the subject of speculation and intrigue for a long time. China’s principal national agency that is in charge of legal prosecution released a warning against the use of non-fungible tokens (NFT) and placed out a set of rules that must be followed, despite the fact that the Chinese government banned banks from providing services related to cryptocurrencies and cracked down on local crypto exchanges back in 2021.
China Believes That NFTs Have Attributes Similar To Crypto
The Supreme People’s Procuratorate of the People’s Republic of China, China’s top financial watchdog, issued a warning on Wednesday, saying that digital collectables like NFT collections had “the attributes of virtual assets,” which are now banned in the nation. The organization released its rules for handling NFTs, recommending improved risk analysis and decision-making as well as reasonable penalties for violations.
According to the prosecutors’ official statement, the national agency is closely monitoring the growth of NFTs in the nation since it could lead to financial problems, management risks, network security breaches, and most importantly, legal challenges.
Is China Considering Banning NFT?
Real or virtual goods are able to have their ownership history checked and stored on a blockchain with the help of NFTs. On the other hand, Chinese prosecutors claim that owners cannot fully “enjoy” their possessions, particularly when it comes to digital art, which can still be duplicated and distributed. The organization was cited as saying:
Consumers are only granted the unique authority to forbid others from altering the ownership of the NFT as it is documented on the blockchain.
China has long been opposed to cryptocurrencies, but it appears to be changing its mind as it attempts to employ blockchain technology to develop its digital infrastructure. Recently, China created its own CBDC, which has proven to be extremely successful.
The organization further emphasized that “as a new application of blockchain technology, NFT has certain development potential”. Therefore, it is uncertain if China will attempt to strictly regulate NFTs or outright ban them. Global watchers will closely monitor Chinese developments as the NFT sector develops and matures since China’s actions are expected to have a significant influence on the wider NFT ecosystem.