- China will launch a state-backed blockchain to support NFTs, according to the South China Morning Post.
- Despite its ban on crypto transactions last year, Beijing is signaling it wants to capitalize on the surging NFT market.
- Multiple Chinese tech companies are supporting the new blockchain, which will be closely monitored by authorities.
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China’s state-backed Blockchain Services Network (BSN) is set to launch new infrastructure to support non-fungible tokens, kickstarting a Chinese NFT market that is not linked to cryptocurrencies, the South China Morning Post reported.
The announcement signals Beijing’s interest in the NFT surge while trying to balance it against its 2021 ban on crypto transactions. The state-backed digital infrastructure will clearly differentiate between cryptocurrencies and NFTs, as the latter will still remain legal.
Still, some tech companies such as JD.com, Baidu, and Tencent Holdings have opted to call their NFTs “digital collectibles.”
The new technology, called the BSN-Distributed Digital Certificate (BSN-DDC), will allow users to manage their NFTs, with all purchases and service fees to be transacted with the Chinese yuan.
A blockchain, typically, is a decentralized platform for open market transactions and information. In China, however, public chains are illegal, He Yifan, CEO of BSN’s technology support provider Red Date Technology, told the South China Morning Post.
In fact, the state requires all online systems to permit regulators to intervene in case of “illegal activities,” He added.
China’s alternative to this is the open permissioned chain, or a version of a blockchain that is governed by a specific entity. China’s BSN is backed by state-owned China Mobile, China UnionPay, and State Information Centre. The BSN-DDC will integrate 10 blockchains, including modified versions of Ethereum and Corda.
More big players and high-profile names continue to enter the digital asset space. In 2021, NFTs ballooned to a $41 billion market, nearly catching up to the size of the global fine art market.