China has made several hostile decisions towards cryptocurrencies in the past. Last year, 10 Chinese authorities issued a joint warning to clarify that cryptocurrencies are not legal tender in the country. Furthermore, they stated that cryptocurrency transactions facilitated in China are illegal and that exchanges will face full rigor of the law if they offer services to Chinese citizens. This announcement did not mention the Non-Fungible Token (NFT).
The latest announcement to that effect from China concerns WeChat, the country's leading social media platform. According to a report, the platform has updated its policies to ban all accounts offering access to cryptocurrencies and NFT services. This would be a major blow to an already struggling market.
According to the new guidelines, accounts that deal with the issuance, trading and financing of cryptocurrencies and NFTs will be placed in the “illegal activities” category.
Accounts providing services or content related to the secondary transaction of digital collections will also be covered by this article.
NFT platforms increase fivefold in China
The government's decision to ban cryptocurrencies was released last year. Interestingly, WeChat continued to host cryptocurrency-related services because its policy in line with the publication had just been updated. Wu Blockchain, a Hong Kong-based cryptocurrency news reporter, pointed out that WeChat has around 1,1 billion daily active users in China.
The updated policies also mention punishments for offenders.
Once such violations are discovered, the WeChat public platform, based on the severity of the violations, will order the violated official accounts to rectify within a time limit and will restrict certain functions of the account until the permanent account is prohibited.
Regardless of this decision, NFTs still enjoy some flexibility in the country, as they can be bought in fiat currency. It is also important to note that companies and platforms strive to avoid compliance issues on the financialization of technology, thereby prohibiting secondary trading.
Although NFTs can be purchased, the China Banking Association, China Internet Finance Association, and Securities Association of China released a joint statement in April to warn the public about the hidden risk of invest in these products.
Just like WeChat, WhaleTalk, owned by the Ant group, has announced that it has distanced itself from the business by removing or limiting the platforms that offer NFT services on its network. This is to avoid a possible crackdown on the part of Beijing. It was also reported that the decision was due to a lack of regulatory clarity on the asset.
Be that as it may, NFT platforms in China have increased fivefold, topping 500 from 100 in February. This would have been aided by the interest of Chinese tech giants like Alibaba and Tencent.
