The Chinese government has publicly denounced the overvaluation of the NFT market, despite two major Chinese technology companies pursuing this technology.
The news was initially disclosed by the Securities Times – a service that serves as a spokesperson for the People’s Daily, the official newspaper of the Chinese Communist Party – and subsequently reported dal South Morning China Post.
“Everyone knows that the NFT market is currently in a bubble“, the statements state. The government further stressed that users acquire NFTs for reasons linked exclusively to speculation and the price of the assetrather than appreciating the actual visual qualities of the piece.
Wang Junhui, reporter for the South Morning China Post, writes:
“Once market enthusiasm subsides and euphoria subsides, the value of many NFTs will drop significantly.”
In June, the People’s Daily published an article in which it claimed that the NFT market “it can be exalted and lead to chaos, while decentralization presents security risks.“
Earlier this year, the Chinese government has dealt a severe blow to mining operations in the territory, forcing companies operating in this sector to transfer their activities abroad.
Anyway, two of the leading tech companies in China, Tencent e Alibaba, have conducted numerous research and development initiatives focused on NFTs, and nowadays actively participate in the sector.
Last month, Tencent launched its NFT trading platform, Huanhe, with the aim of integrating these tokens into its music streaming service, QQ Music.
Similarly, Alibaba’s fintech partner Ant Group recently put two NFT images on sale within its Alipay payments app.
Despite this, the activities of Chinese NFT supporters remain limited: for example, transactions can only be conducted using the fiat currency, the renminbi. Furthermore, NFTs cannot be resold once purchased as this would constitute a violation of financial laws.
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