Ant Group, Tencent vow to stop NFTs secondary trading

June 30, 2022 0 Comments

Chinese tech giants including Tencent and Ant Group on Thursday have signed agreements to stop secondary trading of digital collectibles and “self-regulate” their activities in the market.

According to the Shanghai Securities News, 30 firms and institutes have committed to the “Digital Collectible Industry Self-Discipline Development Initiative,” which is led by the Chinese Cultural Industry Association and aims to prevent secondary trading and speculation in digital collectibles.

China has been taking a tough stance on cryptocurrencies. While financial and cyberspace regulators have yet to outright ban NFT trading, the silence has kept the sector from thriving as it has in the U.S. market.

Chinese tech companies don’t use the term “NFT”, instead, they call them “digital collectibles.” The digital collectibles released by them are housed on private-company-owned blockchains, collectors must purchase them using government-issued money, and resale is prohibited.

For example, if users buy digital collectibles on Alibaba’s NFT platform Jingtan, they need to wait six months to “gift” the item to another user, and the other user needs to wait another two years to gift it again. Alibaba barred its own secondhand marketplace from displaying any NFT products last year. 

Still, resale cannot be completely prohibited since users can bypass the platform for cash transactions.

The self-regulation agreement signed on Thursday includes 14 provisions. Aside from a prohibition on secondary trading, signatories are required to utilize real-name authentication when selling digital collectibles to users. The agreement also requires platforms to guarantee that their blockchain technology are “safe and controlled,” as well as to adequately protect users’ personal information.

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