Non-fungible tokens (NFT) will soon come under the spotlight at China’s ongoing “Two Sessions” – the nation’s most important annual political gathering – with parliament member Feng Qiya set to propose a regulatory framework for NFTs.
See related article: How Web3 in China is taking shape – with ‘Chinese characteristics’
Fast facts
- Feng will propose to establish a clear legal definition of digital collectibles, lay out market access rules for NFT trading platforms and enhance copyright protection for NFTs, according to a local media report on Wednesday.
- Feng urged authorities to clamp down on illegal NFT speculation to prevent the “financialization and securitization” of digital collectibles.
- Feng said that current NFT regulation in China mostly consists of rules established by business insiders and local authorities, and is in need of legislation and a top-down regulatory framework across multiple government branches.
- Initiatives for building a digital economy are expected to be high on the agenda of the Two Sessions, in which Chinese authorities are expected to lay out the nation’s economic plans for the year ahead and reshuffle key roles.
- The proposal follows China’s growing interest and caution about NFTs. Chinese policy makers see the emerging asset class as a potential booster for the economy, even as they constantly seek to discourage NFT trading.
- China’s government agencies, state-backed entities and media have been criticizing the financial risks of NFTs, driving most Chinese NFT platforms to either distance themselves from secondary markets or to develop overseas.
- Huanhe, the NFT marketplace of China’s tech giant Tecent Holdings, stopped NFT sales and initiated refunds in August 2022, and will be shut down in June 2023, according to the mobile app of Huanhe on Thursday.
See related article: Beijing regulator warns about NFT speculation, illegal fundraising. Crackdown coming?