The state-backed platform will serve as a secondary market for NFTs and digital asset copyrights.
According to a report published by local news outlet Sina News on Dec 28, China will launch its first regulated platform for nonfungible tokens (NFT) trading on Jan 1, 2023. The entity, which acts as a secondary market for the exchange of NFTs, was created by the state-owned Chinese Technology Exchange, the state-owned Art Exhibitions China, and Huban Digital Copyrights Ltd, a private corporate entity.
In addition to NFTs, the platform will also facilitate the trading of copyrights related to digital assets. The project aims to “regulate and avoid the excessive speculation in secondary [NFT] markets,” as told by a person familiar with the matter. In an interview, Yu Jianing, a leading expert on digital assets and metaverse developments in China, commented:
“In terms of industry supervision and regulation, digital assets represent a new form of commerce, and much regarding laws, regulations and supervisory policies remains to be refined. Therefore, a deal of uncertainty exists. Platforms have a clear responsibility for the listing and trading of digital assets. Relative to intellectual property rights and digital copyrights, digital assets face a greater risk of regulatory soundness.”
The Hangzhou Internet Court, a court of law specializing in internet-related legal disputes in China, previously ruled on Nov. 29 that NFTs are virtual property protected by law and that they “have the object characteristics of property rights such as value, scarcity, controllability, and tradeability.” Cryptocurrency exchanges have been banned in China since 2021, although the possession of crypto is recognized as virtual property protected by the law.