- China’s Alibaba Group Holding has created an NFT marketplace with the approval of the Sichuan Government
- Alibaba is following the NFT trend, allowing creators to sell their work via blockchain.
- The Chinese government crackdown targets cryptocurrencies, embracing a controllable blockchain infrastructure.
The plausibility of NFT Summer in 2021 is becoming more and more apparent with NFT prices and demand surging. NFTs passed the May 2021 bubble test when market volume decreased by 90%. Yet, institutional investors and institutions are jumping back into the trend, recognizing their digital native value, and will continue to embrace NFTs.
Alibaba Follows the NFT Trend
An SCMP article, published on Tuesday, revealed that Alibaba Group Holding had released an NFT marketplace as a new subsection of Alibaba Auction. The “Blockchain Digital Copyright and Asset Trade,” allows creators and artists to interact with their digital fans by selling and auctioning off blockchain-based NFTs.
According to the same report, the Sichuan Provincial Government has endorsed the project. Thus NFT tokens will be minted through the New Copyright Blockchain – a blockchain endeavor of Sichuan’s Blockchain Association Copyright Committee.
Although the government’s intervention functions as a data gatekeeper to retain control, the underlying infrastructure will operate similarly to any regular blockchain. Buyers will prove digital ownership of their NFT purchase as the ownership encoding protocol will be completed during the purchase.
What’s Selling And What’s Not?
SCMP reporter Josh Ye tweeted that the platform already has several pieces of artwork on digital display from known franchises such as GTA, Star Wars, and the “Wasteland 2” video games. The platform implemented a bidding system that starts at 100 RMB (approximately $15 USD), but requires a deposit of at least 500 RMB ($77) to participate. Although the network is controlled and permitted by the New Copyright Blockchain in Sichuan, there are no reports on whether users can deposit e-yuan or if payments are only allowed through e-payment portals like WeChat or AliPay.
As Josh Ye emphasizes, NFT holders can view and interact with their digital items on Tencent Holdings’ WeChat through the public account of Bit Universe, a native WeChat app. Neither the marketplace nor its creators can guarantee that the NFTs are legally licensed or commissioned, which stands as one of the major counterarguments against NFTs.
On The Flipside
- Blockchain platforms released in China need to be approved and commissioned by a council or the government.
- The Chinese government is keeping blockchain on a short leash to prevent loss of control.
- NFTs turn into speculative assets due to their scarcity, contradicting the government’s initial statement of protecting citizens from financial risks.
The Chinese Are Embracing NFTs.
The Chinese government substantially impacted the crypto market after strong arming miners and crypto operators into ceasing operations. Yet, unlike crypto, blockchain is a technology the government is embracing, so long as it’s controlled.
With the NFT mania capturing global attention, Chinese NFT endeavors have come to fruition. As Insider highlights, Chinese giant Tencent created an NFT platform in August, selling audio clips, whilst Taobao, Alibaba’s e-commerce, first revealed NFTs during the yearly Maker Festival.
Alibaba’s financial service affiliate, Ant Group, partnered with UEFA and awarded the prize of the “Top Scorer” trophy for the UEFA European Championship 2020, in the form of an NFT. Additionally, AliPay, EURO 2020’s visibly illustrated sponsor, distributed 1,600 NFT versions of the digital trophy to European Cup quiz winners.
Why You Should Care?
Alibaba’s NFT marketplace is a means to increase the company’s profit shares by claiming a monopoly of the Chinese NFT market, even though other Alibaba subsidiaries have already worked on or released NFTs. It also shows that the Chinese government doesn’t intend to fully restrict blockchain, but rather to regain control over the technology.