China proposes additional restrictions on NFTs

April 14, 2020

By Sharan Kaur Phillora

China has already banned initial coin offerings, cryptocurrency transactions and crypto mining. Securities Association of China in an announcement said that NFTs, or the tokens used to prove the ownership and authenticity of an item, must not be used for securitization or transacted in cryptocurrencies.

Here’s what we know: 

Restricting NFTs monetary prospects may isolate China from the web3 wave that the rest of the world is eager to jump on.

There is no denying that China sees blockchain as a key aspect in constructing its web economic system. 

An official from the nation’s Securities Regulatory Commission not too long ago hailed web3 as the way forward for the web, saying it could actually resolve issues from the Internet 2.0 period corresponding to the dearth of privateness safety. 

According to China’s monetary regulators a major challenge is the monetary risks of NFTs. The teams warn of speculative, cash laundering and different unlawful monetary actions involving NFTs. However, additionally they acknowledge the function NFTs may play in advancing China’s digital innovation.

In adherence to the proposed restrictions, China has laid a few tips as listed below: 

  • The underlying property of NFTs shouldn’t embrace bonds, insurance coverage, securities, treasured metals or different monetary property.
  • NFT’s nonfungibility shouldn’t be weakened in order to not directly facilitate initial coin offerings.
  • Platforms shouldn’t present centralized exchanges for NFTs.
  • NFTs shouldn’t be transacted in cryptocurrencies.
  • Platforms ought to impose real-identity checks on and retailer transaction data of consumers to root out cash laundering.
  • Entities shouldn’t straight or not directly present financing help to NFT investments.

 


About the author

Sharan Kaur Phillora’s thirst for knowledge has led her to study many different subjects, including NFTs and Blockchain technology – two emerging technologies that will change how we interact with each other in the future. When she isn’t exploring a new idea or concept, she enjoys reading literary masterpieces.

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