Tencent shuts down NFT platform owing to Chinese government’s regressive policies
Even though NFTs are not outlawed in China like cryptos are, the government has issued a fraud alert regarding the nascent industry
By Shashank Bhardwaj
One of the two non fungible token (NFT) platforms operated by China’s internet behemoth Tencent has reportedly been shut down due to dwindling sales, thanks to the country’s regressive monetary policies.
On July 1, Tencent shut down one of its NFT platforms. The other NFT platform is also struggling to survive amidst the adverse market conditions and the Chinese government’s crackdown on the crypto industry. According to a local daily report, the winding-up process for the same started in May. The tech behemoth changed senior executives in charge of running the NFT platform during the final week of May, and by the first week of July, the digital collectible section had been entirely withdrawn from its Tencent News app.
Tencent’s digital collectable platform’s sales decline and eventual shutdown are primarily attributed to erroneous government regulations that prevent purchasers from reselling their NFTs in private transactions once purchased, making these NFTs less profitable. The absence of a secondary market eliminates any potential for generating money on these NFT collectibles.
Early this year, NFTs saw significant growth in China, where numerous tech giants, including Tencent and Alibaba, expressed interest and even launched their digital collectible platforms. However, gaining popularity, it also attracted the government’s attention. The Chinese government has already cautioned investors to look for frauds involving these NFTs.
Weibo and WeChat, two of the biggest Chinese social media platforms, began deleting accounts connected to digital collectibles sites in March out of concern for a government crackdown. In June, Alibaba introduced an NFT platform but quickly took down all online references.
Although the Chinese government is well known for its anti-crypto stance and has openly forbidden all crypto transactions in the nation, NFTs are not subject to the same restrictions. Big corporations and digital behemoths continue to exercise care, nevertheless, out of concern for the Beijing government’s stringent enforcement policies.
Chinese dealers have always managed to evade stern regulatory crackdowns, despite prohibiting crypto trading and mining and a warning against NFTs. For instance, China’s share of Bitcoin (BTC) miners fell to zero from 60 percent after the country banned crypto mining last year.
Recent data, however, indicates that China has moved back up to the second position, indicating that miners managed to avoid the government’s rigorous regulations despite the ban.
Shashank is the founder of yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash