Cryptocurrency is a digital currency that eliminates the need to involve a third person in every transaction. It is decentralized in nature, meaning that it is not controlled by the Government or any other financial institution.
China does not seem to be in favor of the concept of Cryptocurrency. The country imposed restrictions on engaging in Crypto-related activities in the previous year. Many believe that China cannot accept the idea of eliminating the financial regulations.
China’s Take On Crypto
It comes as a shock because many regions are growing to accept and recognize Cryptocurrency. On the other hand, China has gone in another direction of restricting transactions related to Crypto altogether.
The three Chinese associations that have joined hands to work on the issue closely are the China Banking Association, the National Internet Finance Association of China, and the Securities Association of China.
These associations have taken up the task of issuing the guidelines for those looking to undertake Crypto activities. An argument placed on the table by the regulators is that a transaction for Crypto could very well be in connection to performing money laundering, illegal transactions, or speculation.
The activities that the country has banned are Crypto mining, ICOs, and Crypto transactions.
Associations admitted that the NFT marketplace of China was getting hotter every day. Still, they then signaled that the institutions had been asked not to provide any exchange platform for NFT transactions.
Institutions have been warned not to use NFTs as security, loan, insurance, or financial assets. China has also asked the buyers, traders, or sellers to reveal their names to avoid illicit laundering.
Experts believe that China lacks a legal framework to govern its NFT marketplace.
The function of NFTs is to connect creators and collectors or traders to transfer the ownership through a UniqueID. Asking users to reveal their names seems to go against carrying a UniqueID.
The Chinese community is yet to respond to this decision. One point is that the heat in the NFT marketplace will eventually cool down. Exceptions can still be made, though.
For instance, Broadcaster Shandong Television, a television network in China, is working on architecting an NFT marketplace. The question does arise about how it is finding a way to circumvent the warnings & regulations.
Keeping that aside, the concern remains why China is choking one of the fastest-growing industries in the country. What ignited the action was a statement said by a Chinese media outlet where the spokesperson said that NFTs urgently needed supervision.
Following that statement, China accelerated its measures on the crypto market and got the three Chinese associations together.
The move would affect the NFT market in China, with revival being dubious. Financial institutions have basic guidelines based on which the future could brighten up in the coming times.