By Sharan Kaur Phillora
NFTs (or digital collectibles) have a large user base in China, despite the country’s ban on traditional cryptocurrencies. However, NFTs cannot be purchased with cryptocurrencies and are often traded on closed, highly regulated platforms as opposed to open ones. That’s why we’re seeing NFTs expanding into Hong Kong to offset compliance risk.
Here’s what we know:
Last year during FinTech Week 2022 Hong Kong released a series of crypto-friendly policy statements. Hong Kong Financial Secretary Paul Chan said that Hong Kong is exploring several pilot projects to test the technological benefits brought by virtual assets and their application in financial markets. These projects involve non-fungible token (NFT) issuance, green bond tokenization, and a digital Hong Kong dollar.
In light of these developments, Yifan He, chief of Red Date Technology, the developer of the state-backed blockchain infrastructure Blockchain-based Service Network, said in an interview that mainland clients who built NFT platforms on BSN plan to move to Hong Kong, and “they’re discussing with our Hong Kong team to build their platforms there.”
Another NFT platform ShucangCN plans to create a platform in Hong Kong will allow mainland users to transfer their “digital collectibles” – the term for NFTs on the mainland – to the company’s Hong Kong marketplace and trade there, Wang said.
Despite the legitimacy of NFT trading in China, the country plans to launch a state-backed “Digital Asset Trading Platform“. The marketplace will reportedly be built on the “China Cultural Protection Chain,” a platform designed to register, verify, deposit, track and protect digital assets and their intellectual properties.
According to China Daily, the platform will also integrate with other parties to provide users with valuable information, data, and content in relation to the metaverse and digital collectibles.
Despite regulatory uncertainty, it’s clear that China is welcoming and embracing this new digital asset class. This has opened the door for Chinese NFT platforms to expand their reach into Hong Kong, allowing them to offset compliance risk in their home market. As the industry continues to grow and evolve, we can expect even more cross-border collaborations between these two markets.
About the author
Sharan Kaur Phillora’s thirst for knowledge has led her to study many different subjects, including NFTs and Blockchain technology – two emerging technologies that will change how we interact with each other in the future. When she isn’t exploring a new idea or concept, she enjoys reading literary masterpieces.
