The Chinese Communist Party Issues a Warning Against the NFT Craze

The Chinese Communist Party Warns Against The NFT Craze

According to local sources, the Chinese government has issued a series of remarks criticizing the value of the nonfungible token, or NFT, market, although two of the country's top technological businesses are exploring the technology.

The Securities Times, a news publication service serving as a spokesman for the official Chinese Communist Party newspaper People's Daily, broke the story first, then the South Morning China Post reported on it.

According to the statements, “it is common awareness that there is a large bubble in NFT transactions,” and that most NFT purchasers who acquire with a financial motive focus only on the worth of the assets rather than appreciating the piece's visual characteristics.

Wang Junhui, an SMCP staff reporter, writes:

“Once market enthusiasm fades and the hoopla subsides, the value of these numerous odd NFTs will plummet.”

This echoed People's Daily's language from June, when they said that the NFT market "may be pumped up, leading to anarchy, while decentralization may lead to security issues."

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Earlier this year, the Chinese authorities dealt a devastating blow to cryptocurrency mining operations in a concerted effort to evict unfavorable activity from its borders.

However, the country's big tech giants, Tencent Holdings and Alibaba Group Holdings, have advanced with NFT-focused R&D projects and now actively compete in the area.

Tencent launched its NFT trading platform Huanhe last month to integrate NFT assets into its music streaming platform, QQ Music.

Similarly, Ant Group, Alibaba's finance partner, recently placed two NFT pictures for sale on its wallet app Alipay.

Despite this, Chinese NFT proponents continue to face trading restrictions. For example, only the Renminbi, the country's official currency, may be used in transactions. 

Furthermore, once acquired, NFTs cannot be resold since doing so would violate the country's financial regulations.