China NFT Weekly: Official Guide on NFT Industry Development

by James · August 7, 2022

Digestible news on the latest developments across the fields of Web3, NFT, blockchain and metaverse in China and beyond, collected for you every week by Pandaily.

This week: US game developer Unity to spin off China unit to tap country’s metaverse market, Chinese bitcoin mining rig maker Canaan considers US expansion despite crypto winter, People’s Daily issues NFT research project to guide industry development, and more.

Table of Contents

US Game Developer Unity to Spin Off China Unit; Investors betting on Metaverse

US game developer Unity is in advanced talks to spin off its China unit in a bid to expand in the world’s biggest gaming market. Reuters first reported this story.

The San Francisco-based company is seeking strategic investors for a business valued at more than $1 billion, according to sources. Unity’s shares rose over 5% on the news on Tuesday.
The report comes as strained relations between China and the United States prompt global technology firms to reassess their positions with regard to operations in China. Meanwhile, metaverse and web3 technologies are increasingly attracting the attention of game developers and investors.
Unity entered the Chinese market in 2012 and powers many of the country’s best-known games, including “Honor of Kings” and “Genshin Impact.”
The company also hopes that the spin-off will lead to more extensive use of the software in China in areas such as smart city modeling and metaverse. Investors are also said to be betting big on the metaverse, according to the sources.
Unity believes the spin-off will help with China expansion and give the unit more autonomy and control over how it operates in the country. (Reuters)

Chinese Bitcoin Mining Rig Maker Canaan To Expand Despite Crypto Winter

China-based Canaan Inc., one of the world’s largest manufacturers of crypto mining rigs, is pushing ahead with a global expansion despite a cooling of the crypto market. Forkast first reported the story.

In November 2020, it became the first crypto company to be listed on Nasdaq, at a value of $1.35 billion.
The company will focus its expansion plan on the United States this year, and will start its own crypto mining operation in the country, either with a partner or on its own, according to the company’s CEO Edward Lu.
Since China issued a blanket ban on crypto mining last September, the US has seen an influx of Chinese miners, with Texas being one of the most popular destinations.
Canaan reported revenue growth of 236.7% to 1.36 billion yuan ($213.9 million) despite logistics problems and supply chain disruptions during the pandemic. Net income increased from 1.2 million yuan to 441.6 million yuan ($69.7 million).
“The US market is very friendly in terms of policy towards the cryptomining business, so this is a key consideration for why we chose the US market,” said the CEO.
“The infrastructure in the US is very good and the electric grid offers a mix of green energy, which is important for the environment [aspect] of mining. We have to go green if we want to be recognized by the mainstream industry,” he added. (Rejection)

READ MORE: See our previous articles about Kanaan!

Tai Group acquires social media Huobi Chat

Tai Group, a Hong Kong-based investment holding group that invests in blockchain, metaverse and related technologies, announced last week that it has completed the acquisition of Huobi Chat, a social media product under leading crypto exchange and financial services provider Huobi Group. Pandaily first reported the story.

With this acquisition, Tai Group hopes to make Huobi Chat one of the world’s first NFT social platforms and promote the development of China’s metaverse infrastructure.
In addition to investing in metaverse and blockchain, Tai Group also operates a digital collectibles platform to help promote the digitization and circulation of brands and local IPs. The company has reportedly partnered with the cultural and tourism agencies in Beijing, Chongqing, Xi’an and Hunan, as well as brands such as JD.com<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder=""/>Gree Electric and HTC.
Launched in 2018, Huobi Chat is an instant messaging app for blockchain and crpyto communities. Every year, Huobi Chat invests hundreds of millions of yuan in R&D.
As of July 2022, the platform had drawn over seven million users, making it one of the best-known and most popular instant messaging apps among blockchain enthusiasts.
China’s digital collectibles market is expected to exceed 70 billion yuan ($10.35 billion) by 2026, according to local news reports. As of August 2022, the sector saw over 1,000 newly registered digital collectibles. (Pandaly)

RELATED: Read all our previous articles about Huobi!

People’s Daily Issues NFT Research Project to guide industry development

Folkets Dagblad, a state-run newspaper and mouthpiece for the Chinese Communist Party, has launched an NFT research project to “guide the orderly development of digital art” as regulations surrounding the industry remain unclear. SCMP first reported the story.

The People’s Lingjing Research Institute was launched as a joint venture between the newspaper’s corporate unit and Sinofaith, a Shanghai-based IP rights company. The academy will focus its research on legal issues, technical standards and regulatory models for “the process of digitizing works of art,” according to Folkets Dagblad.
Folkets Dagblad opened the research institute in January as a means of promoting its own digital collectibles, China’s response to restrictions around building digital assets on decentralized blockchains. Unlike standard NFTs, which are built on public blockchains and backed by crypto, digital collectibles are built on centrally controlled blockchains and backed by fiat.
The academy’s research projects and publications will have to go through China’s digital publishing system and censorship mechanisms, according to the SCMP.
Lingjing will focus on exploring the “content regulation model” for issuing digital artworks, and guide the market’s “orderly development”, according to Folkets Dagblad. In addition, it will explore issuing digital collectibles overseas as a means of promoting Chinese culture. (SCMP)

Schwab Launches Crypto ETF on NYSE

Last week, multinational financial company Charles Schwab launched its first crypto-themed ETF on the New York Stock Exchange (NYSE). CoinDesk and Investopedia first reported the story.

The ETF will trade under the ticker symbol STCE and will track Schwab’s Crypto Thematic Index, which is “designed to deliver global exposure to companies that may benefit from the development or use of cryptocurrencies (including bitcoin) and other digital assets, and the business activities connected to blockchain and other distributed ledger technology,” according to the company’s website.
In other words, the ETF does not invest directly in crypto, but offers exposure to the crypto ecosystem via companies that make crypto part of their business activities.
The fund will also track companies that can benefit from validating consensus mechanisms and crypto mining as well as digital asset trading and brokerage services, according to the company’s official press release.
It will charge an annual operating fee of 0.30%, which Charles Schwab says is the lowest.
The decision to launch crypto ETFs is a drastic change for Charles Schwab, whose CEO Walt Bettinger has more than once voiced his concerns about virtual assets. However, the CEO said in January 2022 that cryptocurrencies were “hard to ignore.”
Schwab joins BlackRock (BLK) and Fidelity as financial institutions that have launched crypto-related exchange-traded products this year. (CoinDesk, Investopedia)

Coinbase shares rise 10% on boost from meme traders

Shares of beleaguered crypto exchange Coinbase Global rose 10% on Thursday after the company announced a partnership with BlackRock that will allow institutional clients to buy bitcoin. CNBC and Barrons first reported the story.

The unusual jump in Coinbase may be the result of a “short squeeze,” which occurs when a stock moves higher, prompting traders betting the price will fall to buy it to avoid bigger losses.
Coinbase opened at $60.96 a share on Monday and was trading above $116 at points early Thursday — a staggering 90% rally.
Coinbase will offer its premium services to institutional clients of BlackRock’s portfolio management platform, Aladin, the company said on its blog. Coinbase will offer crypto trading, custody, prime brokerage and reporting capabilities.
“Our institutional clients are increasingly interested in gaining exposure to digital asset markets and are focused on how to effectively manage the operational lifecycle of these assets,” said Joseph Chalom, global head of strategic ecosystem partnerships at BlackRock, in a statement. The partnership will allow them to “manage their bitcoin exposures directly within their existing portfolio management and trade flows.” (CNBC, Barron’s)

That’s it for this week’s newsletter – thanks for reading! As always, we welcome feedback on how we can make this newsletter better. Write to us at [email protected]. See you again next week!