Tencent has shut down one of its digital collection (NFT) platforms, despite the fact that NFTs are not prohibited in China like crypto are.
The two nonfungible token (NFT) platforms operated by China’s internet behemoth Tencent have reportedly been shut down due to dwindling sales made possible by the country’s regressive monetary policies.
On July 1, Tencent shut down one of its NFT platforms, while the other is trying to survive. According to a local daily report, the wind-down process for the same started in May. In the final week of May, the internet company changed senior executives in charge of running the NFT platform, and by the first week of July, the digital collectible section had been entirely withdrawn from its Tencent News app.
Tencent’s digital collectible platform’s sales decline and eventual shutdown are primarily attributed to erroneous government regulations that prevent purchasers from reselling their NFTs in private transactions after purchase, which makes these NFTS less profitable. Any potential of generating money from these digital treasures is completely eliminated by the absence of a secondary market.
Early this year, NFTs saw significant growth in China, where numerous tech behemoths, including Tencent and Alibaba, expressed interest and even launched their own digital collection platforms. However, as it gained popularity, it also attracted the attention of the government, which has cautioned investors about frauds connected to these NFTs.
Weibo and WeChat, two of the biggest Chinese social media platforms, began deleting accounts connected to digital collecting sites in March out of concern for a government crackdown. Alibaba introduced an NFT platform in June, but quickly took down all online references to it.
Although the Chinese government is well known for its anti-crypto stance and has openly forbidden all cryptocurrency transactions in the nation, NFTs are not subject to the same restrictions. Big corporations and digital behemoths continue to exercise care, nevertheless, out of concern for the Beijing government’s stringent enforcement policies.
People continue to sell their NFTs in the black market secondary marketplaces, according to Wu Blockchain, a China-focused Twitter account, although major internet companies like Alibaba and Tencent cannot afford to do so.
Chinese dealers have always managed to evade stern regulatory crackdowns, despite a prohibition on cryptocurrency trading and mining as well as a subsequent warning against NFTs. For instance, China’s share of Bitcoin miners decreased from 60% to 0% after the country banned cryptocurrency mining last year. Recent data, however, indicate that China has moved back up to the second position, indicating that miners managed to avoid the government’s rigorous regulations despite them. Similar to this, the country’s NFT platform count increased 5X in just four months.