China’s Tencent closes NFT platform citing unfavorable guidelines

by James · July 15, 2022

On July 1, Tencent closed one of its NFT platforms, while the other struggled financially. Stock Photo by Stephen Shaver / UPI | License image

July 15 (MT Newswires) – The leading technology giant in China, Tencent, has reportedly closed one of its two NFT platforms due to a decline in sales as a result of the Chinese government’s regressive monetary policy.

On July 1, Tencent closed one of its NFT platforms, while the other struggled financially. This process began as far back as May when the crypto market collapsed, draining billions of dollars from industry.

The company transferred certain executives who were responsible for managing the NFT platform in the last week of May, and then in the first week of July, it deleted the digital collectibles section from the Tencent News app.

The fall in sales has been attributed to inadequate government policy. In China, residents can buy digital collectibles, but cannot sell them in private transactions after purchase, which has affected overall profitability. Due to the country’s breakdown in the use of all forms of digital currencies in the decentralized financial area, there are no official secondary markets for relieving NFTs. This has made it difficult to make money on digital collectibles.

Non-fungible tokens have become popular among crypto lovers in China, which has led to technology giants such as Alibaba and Tencent showing tremendous interest, culminating in the launch of their respective NFT platforms. That said, the growth of digital collectibles has led to scrutiny and the Chinese government continues to warn investors about the risks of fraudulent schemes.

In March, social media giants such as WeChat and Weibo began attempts to remove accounts linked to NFTs in an attempt to discourage further restrictive measures on their business operations.

Alibaba launched a digital collectibles platform in June, but the announcement has since disappeared from the Internet. Despite the fact that it is an unfriendly cryptocurrency where transactions involving cryptocurrencies are prohibited, China has not introduced a direct ban on NFTs.

However, technology giants and large corporations are careful not to lose licenses and operating certificates, while citizens continue to download their NFTs in unofficial secondary markets. Unfortunately, large technology companies such as Tencent and Alibaba cannot restrict such activities.

Despite a government ban, China remains second in the line of bitcoin miners. This shows that regardless of strict measures, some miners have found a way around them, and in June it was revealed that there has been a fivefold increase in the number of NFT platforms in the last four months.