Chinese Communist Party warn of NFT hype bubble
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The local news publication, acting as the party’s spokesperson, warned of a major decrease in the value of NFT assets once its bubble pops.
According to local sources, the Chinese government has released a series of statements denouncing the value of the non-fungible token, or NFT, market, despite two of the nationâs major tech firms pursuing the technology.
The story was first released locally by the Securities Times â a news publication service acting as a spokesperson for the official Chinese Communist Party outlet Peopleâs Daily â and reported by the South Morning China Post.
The remarks claimed that âit is common sense that there is a huge bubble in NFT transactionsâ, and that most NFT buyers solely focus on the value of the assets when acquiring with a financial motive, rather than appreciating the visual qualities of the piece.
Staff reporter for the SMCP, Wang Junhui writes:
âOnce market enthusiasm wanes and the hype cools, the value of these many strange NFTs will greatly decrease.â
This echoed the rhetoric of a June publication from Peopleâs Daily in which they stated that the NFT market âcan be hyped up, leading to chaos, while decentralisation may lead to security concernsâ.
Earlier this year, the Chinese government delivered a crushing blow to crypto mining operations in a deliberate attempt to oust unfavored activity from its borders.Â
The countryâs major tech players Tencent Holdings and Alibaba Group Holding have progressed with NFT-focused research and development initiatives, however, and now actively participate in the space.
Last month, Tencent launched itâs NFT trading platform Huanhe with a view to integrate NFT assets onto its music streaming platform, QQ Music.
Likewise, Alibabaâs fintech partner, Ant Group, recently listed two NFT images for sale within its wallet application Alipay.
Despite this, Chinese NFT advocates still remain restricted in their trading activities. For example, only the nationâs official currency Renminbi can be used for transactions. In addition, NFTâs cannot be resold once purchased as this would constitute a breach of the nationâs financial laws.