China to launch state-backed NFT marketplace on special ‘cultural protection’ chain

China, which is rather notorious for its extremely restrictive approach to the crypto sector, is taking small steps to explore the digital asset sector. The country is poised to launch an official state-backed NFT marketplace, which would allow Chinese NFT traders to delve into the space, but under the supervision of the Chinese government. A launch ceremony for this marketplace is scheduled for January 1. It will be held in China’s capital Beijing at a time when the country is once again ravaged by the COVID-19 crisis.

Dubbed the “China Digital Asset Trading Platform,” the initiative aims to create a secure ecosystem for the secondary sale of NFTs, which, if left unchecked, can dangerously expose buyers to hacking attacks and scams.

Three state-owned companies – China Technology Exchange, China Cultural Relics Exchange Center and Huaban Digital Copyright Service Center Co., Ltd – have jointly created these NFT trading platforms and kept them compliant with Chinese laws and regulations, China’s Sina News said in its report.

Instead of using an existing blockchain such as Ethereum or Solana, the Chinese government has decided to base this NFT platform on a specially curated blockchain called the China Cultural Heritage Chain.

The blockchain was reportedly initiated by the China Cultural Relics Exchange Center, aimed at ensuring the copyright protection of the cultural digital sector.

In September last year, China imposed a general ban on all crypto-related activities.

The then government had not yet taken a concrete position on the classification of NFTs.

In this gray zone, secondary sales of digital collectibles in China started to pick up.

In March this year, public WeChat accounts linked to NFT trading were blocked by parent company Tencent.

“In order to avoid the risk of speculation on virtual currency trading, the WeChat public platform has recently standardized and corrected public accounts and small programs for speculation and secondary sales of digital collections,” WeChat said in a statement. pronunciation at that moment.

Despite increasing scrutiny of the virtual asset sector, China is gradually leveraging the potential of blockchain technology.

The country is already widely testing its e-CNY CBDC, which is a blockchain representation of China’s fiat currency.

This week, the Chinese authorities introduced a feature that allows existing CBDC users to send financial gifts as ‘red packets’ to their friends and family. Considered a symbol of ‘good luck’, the ‘red packets’ – also called ‘Hongbao’ – are used to give people money as a good luck gesture around festivals in the Asian country.

China is still unwilling to allow cryptocurrencies to enter its financial systems.

Along with the volatility of the crypto sector and the anonymity of transactions that crypto offers, the electricity required to run crypto-related operations had become a concern to Chinese authorities before banning all activity in that sector.

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