Chinese Tech Giants Alibaba, Tencent requires ID checks for NFT purchases

by James · July 4, 2022

Tencent, Ant Group, Baidu, JD.com and several other leading Chinese technology companies last week released a “self-disciplined development proposal” for the “digital collectibles industry” that would introduce real name authentication for users who issue, buy, and sell non-fungible tokens (NFTs), according to a South China Morning Post report.

According to a statement from the China Cultural Industry Association, the signatories of the agreement also recognized and confirmed the existing regulation banning the use of cryptocurrencies, emphasizing that platforms offering digital collectibles – the term used in mainland China to describe NFTs – can “only” support legal tender as face value and settlement currency. “

Digital collection platforms should also have relevant regulatory certifications, ensure the security of underlying blockchain technologies and strengthen the protection of intellectual property.

Although the document does not mention resale of NFTs, the initiative promises to avoid setting up secondary marketplaces for NFT trading and “firmly resist speculation.”

“Unlike most foreign platforms that use NFT technology as financial products, domestic digital collections are more seen as the category of digital cultural creativity,” said the China Cultural Industry Association.

China and NFTs

The latest initiative for China’s NFT space comes from private companies and as such is not legally binding; However, it may still mark an important step towards more regulatory clarity. Government agencies that are responsible for developing industry standards can take the proposals into account.

Last year, Chinese authorities cracked down on crypto companies in the country, not only banning crypto transactions, but also forcing many Bitcoin mining operators to move abroad.

However, the intervention was not expanded in the NFT area, with China’s state-sponsored Blockchain Services Network announcing in January the establishment of its own platform for launching tokenized digital collectibles – albeit running on permitted, non-public blockchain infrastructure without crypto transactions permitted.

Tech giants, including Tencent, Ant Group and Baidu, have also launched their digital collectors’ markets built on private chains that allow Chinese-only yuan purchases and ban secondary trading.

In April, the National Internet Finance Association of China, the China Banking Association and the Securities Association of China issued guidelines banning the use of NFTs in the issuance of securities, insurance and loans, while preventing the country’s financial institutions from facilitating NFT trading. and investments.