China launches state-backed NFT marketplace, which means the following

China, which is quite notorious for maintaining an extremely restrictive approach towards the crypto sector, is taking small steps to explore the digital assets sector. The country is poised to launch an official, state-backed NFT marketplace that would allow Chinese NFT traders to dabble in the space, but under Chinese government oversight. An opening ceremony for this marketplace is scheduled for January 1st. It will take place in China’s capital, Beijing, at a time when the country is once again being hit by the COVID-19 crisis.

Dubbed the China Digital Asset Trading Platform, the initiative aims to create a secure ecosystem for secondary sales NFTswhich, if left unmonitored, can dangerously expose buyers to hacking and fraud.

Three state-owned companies — China Technology Exchange, China Cultural Relics Exchange Center and Huaban Digital Copyright Service Center Co., Ltd — jointly created this NFT trading platform and kept it in line with China’s laws and regulations, China’s Sina News said in It Is report.

Instead of using an existing one Blockchain like ether or Solanathe Chinese government decided to build this NFT platform on a specially curated blockchain called the China Cultural Heritage Chain.

The blockchain was reportedly initiated by the China Cultural Relics Exchange Center to ensure copyright protection of the cultural digital sector.

In September last year, China imposed a blanket ban on all crypto-related activities.

The government at the time had not established a specific stance on the categorization of NFTs.

In this gray area, secondary sales of digital collectibles in China started to gain momentum.

In March of this year WeChat public accounts associated with NFT trading have been suspended by their parent company Tencent.

“In order to prevent the risk of speculation in virtual currency trading, the WeChat public platform has recently standardized and rectified public accounts and small schemes for speculation and secondary sales of digital collections,” WeChat had said in a expression back then.

Despite increasing oversight of the virtual asset sector, China is gradually unlocking the potential of blockchain technology.

The country is already testing it extensively e-CNY-CBDCwhich is a blockchain representation of China’s fiat currency.

This week, Chinese authorities rolled out a feature for existing CBDC users to send financial gifts to their friends and family ‘red packet’. The “red packets” — also known as “hongbao” — are considered a symbol of “luck” and are used to present money to people at festivals in the Asian nation as a good luck gesture.

China still does not agree to the approval cryptocurrencies to penetrate its financial systems.

Coupled with the volatility of the crypto sector and the anonymity of transactions offered by crypto, the electricity required to keep crypto-related operations afloat had become a concern for Chinese authorities before all activity in the sector was banned.