Chinese Communist Party warns of NFT hype bubble
According to local sources, despite two public companies, the Chinese government has issued a series of statements denouncing the value of the non-fungible token (NFT) in the market.
The story was first published locally by the Securities Times – a news service spokesman for the Chinese Communist Party’s People’s Newspaper – and was published by the South Morning China Post.
The comments stated that “there is usually a big bubble in NFT transactions” and that most NFT buyers only focus on the property’s value rather than the product’s image quality when purchasing for financial reasons.
SMCP rapporteur Wang Junhui wrote:
“Once the market excitement subsides, and the hype cools, the value of many of these exotic NFTs will drop dramatically.”
This echoes the rhetoric of a June issue of People’s Daily in which they stated that the NFT market “could be inflated, which could lead to chaos, while decentralization could create concerns.”
Earlier this year, the Chinese government dealt a heavy blow to cryptocurrency mining operations in a deliberate attempt to remove unpopular activity from its borders.
However, the country’s big tech companies, Tencent Holdings and Alibaba Group Holding have made headway with NFT-focused research and development initiatives and are now actively involved in the field.
Last month, Tencent launched its Huanhe NFT trading platform to integrate NFT assets with its QQ Music music streaming platform.
Likewise, Alibaba’s fintech partner Ant Group recently offered two NFT images for sale in its Alipay Wallet app.
Even so, China’s NFT advocates are still limited in their trading activities. For example, only the country’s official currency, the renminbi, can be used for
transactions. In addition, NFTs cannot be resold after purchase as doing so would be against the country’s financial laws.