China’s recent warning against the use of non-fungible tokens (NFTs) has raised eyebrows in the crypto community, as the country’s principal national agency for legal prosecution, The Supreme People’s Procuratorate, outlined a set of guidelines to be complied with in relation to NFTs. The financial watchdog’s statement shows that China is keeping a close watch on the rise of NFTs within its borders, as it has the potential to generate financial risks, management risks, network security breaches, and legal concerns.
The agency’s guidelines suggest that NFT collections share “the attributes of virtual assets” currently banned in the country and called for improved risk analysis, decision-making, and equitable penalties for offenses. This development may lead to discussions about China’s possibly attempting to either ban or regulate NFTs in a controlled manner.
On the other hand, China has shown renewed interest in using blockchain technology to expand its digital infrastructure. The country recently introduced its own Central Bank Digital Currency (CBDC), which has been considered effective. The agency acknowledged that “as a new application of blockchain technology, NFT has certain development potential.” This suggests that China might find a way to balance the risks and benefits of the blockchain-based technology.
One potential issue raised by Chinese prosecutors is digital art ownership. With NFTs verifying and storing the history of both real and virtual goods, the authorities believe that the owners of digital art cannot truly “enjoy” their possessions, given that these can still be copied and circulated. The statement emphasized that consumers can only enjoy an exclusive right to prohibit others from tampering with the NFT’s ownership recorded on the blockchain.
As the global NFT market evolves, it is crucial that observers keep an eye on developments within China, as the country’s future decisions will significantly impact the broader NFT ecosystem. While the presented content might reflect personal opinions and market conditions, it is always advised that readers conduct thorough market research before investing in cryptocurrencies to avoid any personal financial loss.
Source: Coingape
