By SI Linwei
Ant Group, Baidu, Tencent, and many others have been openly dabbling in NFTs since last year. Ant Group was the first to dip a toe in the water, releasing 8,000 NFTs for 9.9 yuan each early in the year. They sold out immediately on release.
A few days later, one of these NFTs changed hands for 1.5 million yuan on Alibaba's secondhand platform Xianyu. The next day, Xianyu found the water a little too hot and pulled all NFT products from the shelves.
In August, Huanhe, Tencent’s NFT trading platform launched an app and issued its first NFT collection of 300 pieces at 18 yuan each. The collection instantly sold out. JD.com’s first batch of NFTs sold out as soon as they were released.
NetEase is recruiting for its NFT arm NetEase Planet, part of the company’s metaverse business. The aim is to help IP owners with contracts, marketing, and management of digital collections. It also offers collector services.
Words are important
NFTs in China have been rebranded as “digital collections,” and the term NFT is rarely seen in marketing materials these days. Platforms like the sound of “digital collection,” which is completely dissimilar to dubious terms like crypto or virtual currency. China has tough supervision over cryptocurrencies, it launched a sweeping ban on crypto trading last year.
Issuers are torn between prohibiting secondary transactions altogether, but a collection that cannot be traded has much less value, if any at all.
Ant Group allowed collectors to "pass on" their digital collection to others, a discreet move to avoid speculation. This requires real-name authentication which could allow owners to transfer their collections after holding them for at least 180 days.
Last week, global NFT transactions were worth more than half a billion US dollars, with an average price of US$2,485 per piece. OpenSea, the world’s largest NFT trading platform, is valued at US$13 billion, with GMV over US$20 billion. China started late, and statistics are not yet available. In theory, there is no problem with the development of digital collections.
Internet giants have blockchain technology and massive IP resources, which enable them to control the whole process from conception to delivery and beyond. Cash flow aside, the biggest issue in China is sure to be the regulations. The authorities will react swiftly and hard against the slightest whiff of dubious crypto activities.
Compliance is key
HE Yifan, CEO of Red Date Technology, focuses on the compliance of NFTs. He told Jiemian News that the key to the development of Chinese NFTs was that they are traded like any other commodity, and not as financial instruments which will surely draw the attention of the authorities.
Compliance means survival. Or more correctly, non-compliance will mark the end for unorthodox investments. The best way forward for the tech giants is maybe to continue operating in low profiles and try to walk the fine line between the booming market and the swiftly changing regulatory moves.
