Legislative mechanisms and technologies known as the Great Firewall have for decades regulated almost all aspects of digital life in China. But while its role has traditionally controlled the domestic internet, China is now taking further steps to curb the influence of international blockchain and crypto, which have a large influence on the NFT market with ambitions to expand eastward.
With traditional cryptocurrencies and NFTs backed by tokens like Ethereum banned in China, the country offers certain services that, although it could lead to more censorship and control, could allow access for those willing to comply with current regulations, making way. to create content that finds new and profitable avenues for artists and designers.
The Blockchain -based Services Network (BSN), a state -sponsored blockchain network, has now become the primary tool for users seeking digital services that comply with legal regulations. BSN was started by the State Information Center with major state-backed companies like Red Date (a Chinese fintech company founded in 2014, headquartered in Hong Kong), China Mobile (the largest telecommunications service provider in the country), and China UnionPay ( one of the country’s major financial service providers). It aims to help promote blockchain technology to the non-crypto industry and build a global infrastructure for that purpose.
In addition, China has also transitioned to the digital yuan, which, since January 2022, is used by one in five Chinese citizens, according to the People’s Bank of China.
This novel ecosystem paves the way for what are known as BSN-Distributed Digital Certificates (BSN-DDC)-“the essence, the Chinese version of NFT,” according to Jehan ChuSotheby’s former blockchain specialist, VC Kenetic, has invested in Red Date.
“While most decentralized entities in China are restricted, DDC becomes similar to a multi-chain environment, by complying with Chinese law,” Chu said.
Since its launch on January 24, 2022, the BSN-DDC network has merged a number of open blockchains, which are ‘branches’ (primarily the process of moving from a popular public chain) to the DDC network. These include Ethereum, Cosmos and EOS. It offers a version of the block that is set to the limits that can regulate the technology, so that it can identify all participants under Chinese law.
The BSN-DDC initiative has the potential to showcase not only digital art, but also for other applications. Outside of China, NFT has been used by companies like watchmaker Breitling, who distribute it as a passport to luxury goods proving their authenticity.
Many in China’s large technology ecosystem are also involved. Companies like Alibaba, Tencent, and JD have built their own platforms that are different from the BSN-DDC network, but they are in the sense that they offer NFTs and digital assets to the Chinese market under Chinese law. Some of this prohibits users from flipping or reselling purchases on the secondary market, tampering down on it rampant speculation that has dogged many NFT platforms in the West.
One of the major players in this arena is Ant Group’s JingTan (Topnod), a platform that prevents users from selling digital collections, allowing users to give away prizes after being detained for more than 180 days.
Topnod collaborates with national museums in China to produce digital twins of historical relics, as well as collaborates with painters, embroidery artists, and other craftsmen in the cultural industry. He recently collaborated with the Shanghai Symphony Orchestra on a digital artifact of 10,000 audio collections of the earliest symphony phonographic recorded in China, valued at RMB 19.9 (approximately $ 3.15).
Tencent’s digital platform, Huanhe, is also making waves in the country, known as a more diverse choice across all platforms. It also works with museums, but also artists, car brands, consumer products, and charitable organizations.
For example, earlier this year, Huanhe offered digital twins from Dunhuang Grottoes at a price of RMB 118 each ($ 18). All digital works purchased or received from Huanhe can be displayed in a virtual 3D gallery, but Huanhe also prevents secondary market trade. (Earlier this year, Huanhe was in a copyright dispute after a series of digital ink drawings based on artwork by Xu Beihong, a famous Chinese painter, were released on the site.)
NFTCN is another market that is gaining traction in China. Perhaps closest to OpenSea, NFTCN is open to independent artists who want to sell and collect NFT. It has a built -in gallery that allows users to display collections supported by the Ethereum side chain, and is one of the few platforms in China that allows secondary market trading.
All in all, Chu said that the influence of BSN-DDC for the art market in China may be great, but beware of foreign companies entering the market should be wary of China’s well-known censorship laws.
“The opportunity for BSN-DDC in China cannot be underestimated,” he said. “It’s not a single-chain environment, but a multi-chain one with a very robust system of interoperable, consent applications. This is clearly very controversial for the international crypto community, because it includes sensors. But that’s the reality of the existing framework when working in China.
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