China’s tech giants get FOMO on NFTs – TechCrunch

In mid-April, a group of industry associations in China issued a warning about the potential financial risks of non-fungible tokens or digital assets that represent real objects or intangible goods like song. The country’s banking, online finance and securities associations have said that NFTs should not be traded with cryptocurrencies, and should not be used to create securitized products.

Although industry associations have no regulatory power, they still exert influence and are taken seriously by policy makers. Many in the crypto industry see this announcement as a death knell for the development of NFTs in China. Oddly enough, though, China’s tech giants are showing a growing interest – or some might say, FOMO – in space.

Since cryptocurrency trading is prohibited in China, NFTs are present in a restricted manner in the country. In place of NFTs, tech companies call them “digital holdings” to distance their initiatives from the financial and speculative nature of many NFTs, while emphasizing the use case function of proof of ownership and credibility. As such, many objects minted in China are works of art such as an ancient Chinese Buddhist statue or an object of historical or cultural significance, such as the famous Chinese spaceship.

As the financial associations said in the statement, the value of NFTs lies in their ability to foster the growth of the creative and cultural industry.

Unlike NFTs that are minted on Ethereum or other public chains and trade with cryptocurrencies on open markets, digital holdings issued in China are minted on licensed blockchains operated by local tech giants and are often sold on these companies’ private channels. Users will first have to verify their real identities on these platforms before purchasing collectibles using the Chinese yuan fiat currency and are prohibited from reselling the business on secondary markets.

The regulations mean that digital holdings in China are separate from the global NFT market and are highly illiquid. Some platforms allow owners to give away their assets, but only for free and after a few months of purchase.

However, Chinese tech giants have been quick to launch digital collectibles, and some have even ventured out of bounds to sell their NFTs overseas. Below we have summarized some of the major players in the space so far:

  • Whaletalk (鲸 探) is the leading digital collection service created by Ant Group, a subsidiary of Alibaba’s fintech company, in mid-2021. Artworks are minted on AntChain, a distributed ledger that needs permission to join (also called federation/alliance chain) It is jointly managed by Ant and its institutional partners.

Screenshots from the Whaletalk app

  • In April, food delivery service Alibaba Elli.me introduced digital collectibles on its app, which is a comprehensive platform for Chinese users to order services on demand, and now, they buy digital food-themed collectibles as well.
  • Last August, Tencent launched Magic Core (幻) in Zhixin Series, a consortium chain created by Tencent and its partners. The most notable use case for Zhixin Chain has been to replace physical ink seals, or company stamps for document authentication, with blockchain.
  • Online retail giant JD.com unveiled its Lingxi (灵) platform running Zhizhen Chain, a chain consortium it runs, in December.
  • Baidu, the country’s search and self-driving giant, released a space-day-themed collection on its Xuperchain consortium in April.

go abroad go abroad

Some Chinese tech giants have taken their NFT ambitions abroad — or at least are signaling a strong interest.

  • This week, Bilibili, a popular user-generated video streaming site in China, said it is releasing a set of 10,000 unique profile pictures through its third-party partner. CryptoNattyIt is a recently established company in Singapore. The company has “licensed” its intellectual property to CryptoNatty, which will mint the pictograms on Ethereum. It is unclear how the two parties share revenue or who the target audience is, given that most of Bilibili’s users are located in China. We have reached out to Bilibili for more details.
  • This week, Huawei Tweet about Caked Ape group, driving up the price of NFT land. The vaguely worded tweet does not refer to the Chinese telecom giant’s relationship with Caked Apes.
  • TikTok, the short video giant owned by ByteDance, has distributed its first NFT pool to Ethereum. in October Featuring Detroit rapper Curtis Roach. The company’s endeavor has been described as “not performing enough” as it has reportedly not fulfilled its promises to work with popular artists such as Lil Nas X and Grimes.
  • Cai Wensheng, founder of Chinese selfie app Meitu, is perhaps the biggest crypto bull in China’s tech industry. Not only was he an early investor in bitcoin, but he also made the decision for Meitu to own up to $100 million in cryptocurrency. Meitu bought the first batch of Bitcoin and Ether for a total of $40 million in March 2021.

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