NFTs firms in China increase 5X amid regulatory uncertainty

Non-fungible tokens (NFTs) have become some of the most popular digital assets globally. These assets are seeing notable growth in the most unlikely locations, such as China. NFT platforms in China have increased to more than 500, depicting a 5 times growth within a few months.

NFT firms in China grow 5X

In February this year, the number of NFT platforms in China sat at around 100. However, these platforms have now increased to more than 500, per the recent data shared by a local Chinese publication.

The NFT space in China has been not only attractive to individuals but also to large corporates. Some of the leading tech companies in China, such as Alibaba and Tencent, have shown increased interest in the NFT space. These companies have even filed several trademark patents related to the NFT space.

Despite this notable growth, authorities in the country have severally warned people against the speculative trading of NFTs. Local authorities believe that the NFT market is filled with speculators who trade these assets in the secondary market, which poses a risk to investors.

Besides acting as an investment method, NFTs have also become popular among residents who want to protest through art. During the weeks-long Shanghai lockdown, residents posted many NFTs on the OpenSea marketplace.

The regulatory framework for NFTs in China lacks much clarity. However, individuals and businesses have continued to interact with these digital assets. Alibaba recently unveiled a new NFT product but later deleted all details of this launch online.

Tech giants like Alibaba must be cautious when interacting with NFTs because of the regulatory scrutiny. The company’s affiliates like Tencent Holdings and Ant Group have listed their NFTs as “digital collectibles” to avoid regulatory backlash. These NFTs are also promoted on private blockchains and can be traded through the Chinese fiat currency.

China’s crypto ban proves futile

China has shown a hostile attitude towards the entire crypto space. Last year, the country banned cryptocurrency mining and trading activities. However, the ban does not seem to be working.

When China banned crypto mining last year, the Bitcoin network mining hash rate dropped by 50%. Most miners left the country and set up new overseas locations. Currently, China has gone back to being the second-largest Bitcoin miner after the US in terms of hash power.