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China had seen a widespread ban on crypto transactions and crypto mining in 2021. Now, the China Economic Daily, the voice of China’s Communist Party, hints at stricter regulations on ‘digital collections’ or NFTs. China will look to regulate “digital collections” under multiple departments as it sees them as having speculative attributes of commodity, currency, and securities.
China Intends Strict Regulations on Digital Collections
China’s Communist Part’s official newspaper on Wednesday argued against treating digital collections as only cultural and creative collections. Hence, its supervision under market supervision departments and intellectual property departments is not enough. As a product of financial technology, it should be regulated under strict supervision.
According to the daily, the companies in China, including the Internet giants and startups, have already built NFT platforms to attract individual creators, artists, museums, and known brands to explore and release digital collections. The risk is high for consumers due to the weak price system of digital collections and the high risk of speculation.
Recently, China’s WeChat messaging app has suspended some accounts linked to non-fungible tokens (NFTs) to prevent speculation or secondary transactions. However, there are still some platforms that release, resell, and charge high prices for digital collections.
Chinese experts recommend introducing a regulatory framework, complying with regulatory agencies by digital collections platforms, reporting operating mechanisms and consumer rights protection, and conducting regular trials could prevent illegal speculation and secondary transactions.
China’s Supervision of Digital Collections or NFTs
Since China’s blanket ban on crypto trading and mining in 2021, the Chinese government has warned its citizens about taking part in any speculative trading such as digital collections and tokens. Therefore, it has put pressure on NFT issuers and owners regarding a possible regulation that might be upcoming.
China’s Communist Part’s official newspaper also warned consumers about taking a calm and rational approach in owing digital collections until a regulatory framework is clarified by the Chinese government. Moreover, in order to establish leadership in the upcoming Web 3.0 generation of the internet, China must first supervise and regulate such innovative technologies.
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