Quick take:
- WeChat has banned a dozen NFT accounts from its marketplace.
- The leading Chinese messaging app is looking to stay on the right side of the law in case the government rolls out new regulations.
- China has yet to launch NFT regulations but crypto trading, including digital assets like NFTs, is prohibited.
WeChat has banned a dozen NFT accounts from its marketplace. According to reports on Wednesday, the accounts were associated with NFT promotion and trading. Cryptocurrency trading is outlawed in China, and that includes digital assets like non-fungible tokens (NFTs).
China is yet to formularise a framework for regulating NFTs. However, the Asian nation has a very strict approach to cryptocurrency. Although the Chinese can still buy and hold non-fungible tokens, they are not permitted to trade on the secondary market. In addition, interested collectors can only buy NFTs using the country’s local currency Yuan.
The country banned crypto trading, calling it speculation or even gambling. As a result, no foreign blockchain platforms like Ethereum or Tezos are authorised to operate in the country.
In January, China said it was developing its own blockchain infrastructure on which private companies will be able to launch NFT projects. The Blockchain Service Network (BSN) will help the country create an NFT ecosystem that is not connected to the wider blockchain economy.
Despite China’s rigid stance on crypto, several technology giants have proceeded to launch projects tied to the crypto industry. Alibaba, Tencent and JD.com have all launched projects offering digital collectibles to their customers.
However, a common theme about their projects has been the prohibition of reselling the collectibles on the secondary market as they prepare for potential regulation.
WeChat’s move to ban NFT accounts reportedly linked to promoting and trading collectibles has been interpreted as an attempt to stay on the right side of the law before China finally rolls out a clear framework for regulating NFTs.
Commenting on the incident, Tencent said it has “rectified” public accounts on WeChat to curb the risk of speculation in digital asset transactions. However, the internet giant did not respond to questions seeking clarification if WeChat had banned those accounts.
However, WeChat’s official Weibo account clarified the rules governing its NFT marketplace saying “official accounts verified by Tencent can display digital collectibles but cannot offer secondary sales.”
In addition, WeChat NFT marketplace accounts are required to provide proof of registration and approval in the form of a certificate issued by China’s cyberspace regulator.
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