Just-In: Chinese Government Agencies To Tighten NFT Regulation

Chinese Government agencies are opting for every single option to crackdown on cryptocurrency evolution. The China Internet Finance Association and two other Government agencies have launched a joint initiative to prevent NFT-related financial risks.

The Chinese government intends to roll out strict measures to prevent the trading of NFTs, called digital collectibles in the country. The collectibles are among the last ties China has to crypto after the country banned cryptocurrency trading and mining in 2021.

China to tighten NFT rules

According to local media reports, China’s Internet Finance Association, the China Banking Association and China Securities Association are the three bodies involved in clamping down on NFTs. The three will seek to prevent any “securitization” of NFTs, and ensure they are not tied to any other financial products.

In order to prevent the financial risk and illegal activities, the government will also mandate accurate and full disclosure of NFT products so that the consumers can choose wisely to pursue fair trade. The government also plans to take more measures against associating NFTs with conventional cryptocurrencies, although it was not immediately clear what these would entail.

Chinese internet giants Alibaba and Tencent had recently clamped down on their NFT marketplaces, leading many to believe that the government was planning further measures against the space.

Given China’s near draconian stance against crypto, the two were likely acting preemptively before a possible ban.

But while the government maintains an anti-crypto stance, some authorities believe that Blockchain technology and NFT have potential in enriching the economy. Several government agencies, including the Sichuan provincial government, have made their own forays into the space.

Proper identification needed to deal in NFTs

Adding on, the authority wants to bar direct or indirect investment support for NFT. The report mentions that name authentications will be required for selling, purchasing and issuing digital assets. It would be needed to maintain customer identity information and other transaction records to cooperate with anti money laundering initiatives

The report concluded by warning consumers to deal with the right concepts and to ignore speculations around it.