- Tencent has closed its NFT business.
- The entertainment company replaced the “Digital Collections” section in the app with “Digital Orders”.
- Users of the app will still be able to view their collections in the Tencent app, but they won’t be able to sell them.
Tencent has replaced the “Digital Collections” section of its news app with “Digital Orders” preventing users from trading NFTs. The company is one of the several Chinese tech giants on a mission to remove secondary trading of non-fungible tokens from the country.
The move could be a signal the entertainment giant is acting on its plan to create a marketplace compliant with government regulations.
The change means that whilst traders continue to view purchased collections from the news app, they won’t be able to sell them, Blue Whale Finance, which noticed the change reported.
The app now is currently only displaying famous paintings by Chinese creators including works by Qi Baishi, Pan Tianshou, and Fu Baoshi, among others. Several users have requested refunds in the comments section of the app according to a report by lanjiger.com.
The Blue Whale Finance report, however, states that the platform may have failed to gain traction after digital collections released by Tencent news failed to attract buyers with some works considered to be unsellable.
But this could be related to restrictions placed on the Chinese NFT market, where collectors are allowed to buy and hold only, which eliminates the possibility of making a profit from selling in secondary markets.
Last month, leading Chinese technology giants led by Baidu and JD.com, Tencent, and Ant Group teamed up with the Chinese Cultural Industry Association to sign up for the “Digital Collectible Industry Self-Discipline Development Initiative”, a body dedicated to preventing secondary trading of NFTs and speculation.
The companies signed the 14-page document a few days later endorsing the creation of a digital collections market that is self-regulating and requires real-name authentication for NFT buyers.
The companies are trying to leverage the success US companies have experienced using NFTs to improve engagement with customers. Several retail companies have dived on the NFT train to boost customer engagement with their products and Tencent, could use the same vehicle to ramp up its top line.
Tencent’s net profit declined by 23% in the most recent quarter after advertising revenue from Tencent News and Tencent video fell by 30% from the same quarter a year ago.
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