Tencent Gives Up On NFTs In China Amid Government Scrutiny

Tencent said on Tuesday it won’t sell digital collectibles on its Huanhe NFT platform anymore amid increased government scrutiny.
Image source: jingdaily.com

Quick take:

  • Tencent has stopped the sale of digital collectibles on the Huanhe NFT platform.
  • The Chinese technology giant has bowed to the big challenge presented by persistent government scrutiny.
  • NFTs are banned in China, but companies have tried to cleverly present them to traders as digital collectibles.

Tencent has finally given up hope of offering non-fungible tokens to digital collectibles collectors in mainland China. The company teamed up with other Chinese tech giants in June to launch a self-governed solution for operating an NFT platform in the country. 

The union was seen as a bright light in what has essentially been one of the most difficult markets for digital colectibles traders. However, now it seems that with Tencent’s latest announcement, that light has all but been put off.

China has remained steadfast in its position to ban digital assets trading in the country, which according to the Beijing regulator include among other products, non-fungible tokens (NFTs), cryptocurrencies like bitcoin and ethereum, and other tokenised items like blockchain gaming and marketplace tokens.

In June, Tencent, Ant Group, Baidu, JD.com and others teamed up with the Chinese Cultural Industry Association to form a self-regulating cartel that would prevent digital collectors from trading NFTs for capital gain.

All these technology companies have previously expressed their desire to offer ‘digital collectibles’ to their fans, or have created a marketplace for digital collectibles.

Tencent’s decision comes in a series of events that also saw it initially shut secondary trading of NFTs, as well as, stop listing of collectibles on its news app. Last month the company renamed the segment previously called “Digital Collections” into “Digital Orders”, subsequently stopping collectors from selling their holdings.

The Huanhe NFT platform was launched in August last year, as a strategic vertical to capitalise on the rapid adoption of NFTs in the mainstream. However, China’s strict regulation on digital assets has effectively forced the closure of the unit.

Tencent said whilst it won’t be offering new digital collectibles to users of the platform, those that have some collections in their possession will still be able to display them or request a refund.

“Based on the company’s consideration to focus on its core strategy, Huanhe is making adjustments to its business,” Tencent said in a statement.

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