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China Creates Own NFTs, Continuing Trend of “Borrowing” Western Tech

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The People’s Republic of China has revealed intentions to introduce its version of NFTs, albeit an uninteresting variety. The news comes after the  South China Morning Post, recently published a white paper.

The document details an NFT mechanism for archiving historical assets on state-approved blockchains. It is worthy to note that China recently banned all crypto-related activities, causing residents who still wish to trade digital assets to turn to virtual private networks (VPNs) to access crypto markets and services.

NFT Market Volume Dips

Globally, the NFT marketplace has seen a drastic fall in volume since the highs witnessed in the summer of 2021. Data released by Nansen Blue Chip Index, a crypto analytics firm, reveals plummeting liquidity in the NFT space over the last three months. The reports also highlight a fall in the market capitalization of the top 20 digital collectibles studied.

Capitalization (Street) and volume (pillar) | Source: Nansen

After hitting a record high of 4.5 million ETH in late August, trading volume has slumped below 4,000 ETH. The chart shows that this represents a more than 99.9% decline in less than three months.

Given the current state of the NFT market, it is worth stating that China hopes to leverage a possible future rebound to latch onto the growing frenzy of digital arts. Hence, its push to provide support through a state-backed infrastructure.

Chinese Companies Lean Into NFTs

Several Chinese companies are taking advantage of the NFT boom to venture into the businesses of creating and sharing these assets. Tech giant Alibaba has now opened a marketplace where artists may develop “digital collectibles” to protect their work’s copyright.

The term  “digital collectibles” represents the version of Chinese NFTs local authorities intend to maintain. Chinese regulatory authorities have strengthened their supervision of NFTs as it represents a potentially significant bubble. As a result, it met with the most prominent Chinese tech companies offering NFT services. Popular Chinese journalist Colin Wu corroborated this meeting in this tweet.