China’s Crackdown On Cryptocurrencies Will Not Target Digital Collectibles

Despite China declaring all cryptocurrency transactions illegal last year, China doesn’t want to miss out on the potential trillion dollar NFT market.

It’s been noted that Chinese Businesses involved in the creation and sale of NFTs have been badly hit by the country’s decision to crackdown on cryptocurrency. This has in turn prompted China to draw a clear distinction between cryptocurrencies and nonfungible tokens. Making it clear that the NFT ecosystem is safe in China and has the government’s full support.

The Blockchain-based Service Network (BSN), a government-backed blockchain project in China, is working on infrastructure that would support businesses and individuals to build platforms and apps to manage NFTs, the South China Morning Post reported.

Officially called the BSN-Distributed Digital Certificate (BSN-DDC), the project aims to support the deployment of non-crypto NFTs by offering application programming interfaces for the development of user portals and apps where fiat money would be the sole payment method.

Underscoring that NFTs have no legal trouble in China as long as they are not used with Bitcoin (BTC) or other cryptocurrencies, Yifan He, CEO of BSN’s tech support provider Red Date Technology, said that the upcoming infrastructure would use an open, permissioned blockchain to enable an on-chain governing body.

“Public chains can’t be legally operated within China,” he said, adding that a credible, low-cost infrastructure is desperately needed to host all NFTs in China. Without a dedicated, nationwide NFT infrastructure, NFTs can only be deployed on “unreliable” private chains in the country, the executive added.

By enabling a centralized entity to govern the infrastructure and intervene in the event of illegal activity, Red Date plans to create a compliant NFT platform that is fully separated from the regular profile of crypto.

He noted that Red Date is working with all DDC project partners to make the network as transparent as possible while staying compliant with Chinese regulations and laws. All the gas fees on the BSN-DDC network are paid with fiat money.

“We will provide services to NFT companies in Hong Kong, which means if there is any international business involving issuing NFTs inside China, they definitely can choose to use the BSN-DDC network via our Hong Kong gateway.”

State-owned China Mobile, China UnionPay and State Information Centre support BSN’s NFT infrastructure. The BSN-DDC will integrate 10 blockchains, including the adapted version of Ethereum and Corda, as well as WeBank’s Fisco Bcos, he said.

Last year, Red Date Technology signed an agreement with Turkish consultancy firm Turkish Chinese Business Matching Center to launch two international BSN portals in Turkey and Uzbekistan.