The Chinese government has issued a series of statements condemning the value of the market for non-fungible tokens, or NFTs, despite the fact that two major Chinese tech companies are pursuing the technology.
The statements claim that “it is common knowledge that there is a huge bubble in NFT trading” and that most NFT buyers are only concerned with the value of the asset when acquiring with financial motives, rather than appreciating the visual quality of the work.
“Once the market enthusiasm wanes and the hype cools, the value of many of these strange NFTs will be greatly diminished.”
This echoes comments published in June by the official media People’s Daily, who said that the NFT market “could be speculated and lead to chaos, while fragmentation could lead to security concerns.”
Earlier this year, the Chinese government dealt a heavy blow to cryptocurrency mining operations, deliberately pushing unfavorable activities out of the country.
However, major Chinese tech companies Tencent Holdings and Alibaba Group Holding have made progress with their NFT-focused research and development programs and are now actively participating in the space.
Last month, Tencent launched its NFT trading platform, Phantom Core, with the aim of integrating NFT assets into its music streaming platform QQ Music.
Similarly, Alibaba’s fintech partner Ant Financial Services Group recently listed two NFT images for sale in its wallet app Alipay.
Nonetheless, Chinese NFT advocates are still restricted in their trading activities. For example, only the country’s official currency, the yuan, can be used for transactions. In addition, NFT purchases cannot be resold, as this would constitute a violation of the country’s financial laws.