China warns of NFT hype bubble
The Chinese government has issued a series of statements condemning the value of NFT tokens in the market despite two of the country’s largest tech companies pursuing the technology.
The statement was first published by the Securities Times, a news service supervised by the People’s Daily, the mouthpiece of the Chinese Communist Party, and said that “there is a huge bubble in NFT transactions.” and most NFT buyers only focus on real estate value when buying for financial reasons rather than appreciating the image quality of the product.
South Morning China Post has news reformulated and wrote:
“Once the market excitement subsides, and the hype cools, the value of many of these exotic NFTs will drop dramatically.”
A June People’s Daily online article said the NFT market “may be bloated, which could lead to chaos, while decentralization could lead to security 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 the NFT Huanhe trading platform to integrate NFT assets into 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, RMB, can be used for transactions. In addition, NFTs cannot be resold after purchase as doing so would be against the country’s financial laws.
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According to Cointelegraph